The Food and Beverage Association of Ghana (FABAG) has indicated its readiness to support any presidential candidate committed to addressing its concerns and challenges.
According to the FABAG’s chairman, John Awuni, the private sector has been buffeted by an array of different taxes and his association is ready to hear the position of the flagbearers of the various political parties on the taxes and policies that will benefit his members and improve their businesses.
In a press statement issued on Monday, February 12, Mr. Awuni noted that “Currently, the private sector is disillusioned, with most players exploring investment options in neighbouring countries such as Togo and Cote d’Ivoire. Most businesses are seeing their working capital disappearing by the day.”
He further encouraged members of the association to vote in the upcoming elections based on the taxes and policies each presidential aspirant will bring on board.
“Indeed, members of our association as well as our employees will be encouraged to vote based on how the various political parties commit to addressing the key concerns of the private sector. The sector is the engine of growth but currently, the engine is grinding to a halt. Business-friendly government policies which constitute fuel and lubricants of a healthy engine have gradually been replaced with business-killer policies. We would like to know how this engine will be re-ignited when a new administration takes power. How the sector will be revitalized needs to be clearly articulated and documented in manifestoes. Questions that beg the attention of those seeking the mandate of Ghanaians to govern are as follows: What will be the specific tax policies for imports, manufacturing, and the Service sector? How will they make the private sector genuinely profitable if given the mandate? At the moment, most players, including members of our apex association in the private sector feel unwelcomed by the government and viewed as though they are criminals for demanding a break from over-taxation. The attacks, mudslinging, and harassment are dispiriting. We don’t feel the backing and support of the State,” he added.
Read the full statement below;
12TH FEBRUARY 2024
PRESS RELEASE
THE BUSINESS COMMUNITY POISED TO THROW SUPPORT FOR PRO-PRIVATE SECTOR MANIFESTOS IN THE 2024 ELECTIONS – FABAG
The Private Sector is said to be the engine of growth in most economies. Leaders of most countries have successfully moved their countries from third world to first world through the activities of the private sector. However, the level and speed of growth is a function of the government’s policies. It is the responsibility of the government of the day to create the enabling environment to trigger the necessary growth and development in the private sector. The government has to come out with clear-cut fiscal and monetary policies to unleash the potential of the private sector.
In Ghana, the private sector has over the years been unable to unleash its full potential to spur the necessary growth and development in the economy. The Manufacturing sector is largely underdeveloped and growth is patchy and lacks resilience. Ghana remains largely agrarian with the service sector growing faster than the real productive sectors. The economy is dominated by small and medium-scale businesses due to the poor environment created by the governments over the years. With an unleashed potential, the sector is already estimated to employ more than 80% of the workforce and generate over 70% of GDP.[1] However, a recent study by the Ghana Enterprise Agency (GEA) shows that most Micro, Small, and Medium-scale Enterprises (MSMEs) in Ghana are unwilling to formalize their businesses due to taxation.[2]
Indeed, the private sector has been buffeted by an array of different taxes, with overall tax levels constantly rising, the Ghanaian cedi is in a continuous state of fluctuation, interest rates at unparalleled levels in the sub-region, making borrowing difficult and unattractive, inflation rate in double-digits and sky-high, utility tariffs and fuel prices excessive, and there are too many regulatory institutions with overlapping functions and general negative government policies that do not engender the desired growth and development in the private sector.
Currently, the private sector is disillusioned with most players exploring investment options in neigbouring countries such as Togo and Cote d’Ivoire. Most businesses are seeing their working capital disappearing by the day. Below are some unfriendly business policies introduced since the year 2017 which have negatively affected the cost of production and doing business in the country:
- Institution of the benchmark values system
- Reversal of the benchmark discount system
- Increased in benchmark values, circa 2023
- Introduction of the Covid -19 levy
- Introduction of E-levy
- Cancellation of the VAT flat rate system
- Increased in VAT rate from 12.5% to 15%
- Increased in Utility tariffs by almost 100%
- Quarterly increase in Utility tariffs
- Introduction of Excise tax for fruit juices and water
- Introduction of the growth and sustainability tax
- Carbon Emissions tax among others.
The introduction of each of these taxes and policies has been consistently met with stiff resistance from the private sector but on each occasion, the government chooses to ignore the cries and concerns of the sector. Currently, business sector leaders unanimously agree that they are over-taxed and the sector requires immediate attention with a needed review of the majority of these taxes and inimical and anti-business policies.
Given the above, the sector would like to hear the position of the Flagbearers of the various political parties on the taxes and policies outlined above.
It is important to indicate that we have taken note of Vice-President Bawumia’s recent address to the nation on his vision and actions should he become President of the Republic of Ghana. Among a broad array of issues addressed in his speech, he highlighted that he would cancel some taxes when given the opportunity. Much as we appreciate this, we call for more of such declarations and a deeper look into the problems of the Ghanaian economy especially the ones affecting the private sector. We look forward to bold clear-cut policy directions in the different spheres of the economy.
Indeed, members of our Association as well as our employees will be encouraged to vote based on how the various political parties commit to address the key concerns of the private sector. The sector is the engine of growth but currently, the engine is grinding to a halt. Business-friendly government policies which constitute fuel and lubricants of a healthy engine have gradually been replaced with business-killer policies. We would like to know how this engine will be re-ignited when a new administration takes power. How the sector will be revitalized needs to be clearly articulated and documented in manifestoes. Questions that beg the attention of those seeking the mandate of Ghanaians to govern are as follows: What will be the specific tax policies for imports, manufacturing, and the Service sector? How will they make the private sector genuinely profitable if given the mandate? At the moment, most players including members of our apex association in the private sector feel unwelcomed by the government and viewed as though they are criminals for demanding a break from over-taxation. The attacks, mudslinging, and harassment are dispiriting. We don’t feel the backing and support of the State.
Tell us!! We want to know!! Put it in your manifesto! We want to decide based on the specific solutions you seek to provide! We want to sign proper social contracts.
Thank you.
Signed
Rev. John Awuni
Chairman,
0244311041