On Monday, this week, graphiconline.com published a story about the Association of Ghana Industries (AGI) bemoaning the excessive tax impositions, which are rendering their businesses unattractive. The Association also says the removal of incentives on the importation of raw materials is a potential threat to their business.
According to the AGI, it expects government, through the Ghana Revenue Authority, to incorporate the concerns of businesses and industries into tax policy decisions. The businesses registered their displeasure during the quarterly general meeting of the Ashanti, Bono and Bono East regional branch of the AGI.
The AGI plays a pivotal role in promoting and advocating for the interests of the Ghanaian industrial sector. However, the thriving growth of this essential organisation is increasingly threatened by the weight of excessive tax impositions. As the government seeks revenue sources to fund public services and development initiatives, the imposition of high taxes on the AGI and its member industries has resulted in a series of adverse effects.
The Chronicle is of the view that, excessive tax impositions place a significant financial burden on the AGI and its member industries, reducing its profitability and impeding expansion and investment opportunities. Government must bear in mind that when the growth potential of the industrial sector is stifled, it hinders job creation and economic development in the country.
Also, high tax rates negatively affect the competitiveness of Ghanaian industries on the global market. When AGI member companies face higher taxes, compared to their foreign counterparts, they struggle to offer competitive prices for their products. This leads to a decline in export competitiveness, hindering the industry’s ability to penetrate international markets and increasing reliance on imported goods.
This goes a long way to impact employment because it may force some AGI member industries to downsize their workforce or even cease operations, leading to job losses and increased unemployment rates.
The Chronicle believes that by streamlining tax policies and reducing tax rates, AGI member companies can offer more competitive prices for their products, facilitating export growth. A competitive industrial sector contributes to increased foreign exchange earnings, reduces dependence on imports and will help to enhance Ghana’s overall economic resilience.
A tax environment that is conducive to growth can stimulate research and innovation among AGI member industries. By easing the financial burden, companies have more resources to invest in research and development initiatives. Enhanced innovation can lead to the development of new products and technologies, propelling the industrial sector forward and contributing to sustainable economic development.
Striking a balance between revenue generation and supporting businesses is essential to unleash the full potential of the industrial sector. By reducing tax burdens, the government can encourage investment, innovation, and job creation, while also promoting responsible tax compliance and strengthening government-industry relations.
The Chronicle wishes for a collaborative effort between the AGI, through the Ghana Revenue Authority to create a congenial atmosphere for all stakeholders in the sector, as Ghana continues its journey towards becoming a globally competitive and economically resilient nation.