“GPMA Warns of Industrial Crisis if 5% Exercise Tax is Not Suspended”
The Ghana Manufacturing Association (GPMA) has issued a passionate plea to the Ghana Revenue Authority (GRA) to suspend the intended additional 5% exercise duty, which is set to take effect soon. According to the association, the imposition of this tax will have devastating consequences on the industry, leading to increased overhead costs, potential factory closures, and job losses.
Speaking on behalf of the association, President Dr. Effah Botwe emphasized that the industry is already struggling under the weight of numerous taxes and levies, including a 10% exercise duty, import duties on raw materials, corporate taxes, and other levies that constitute about 40% of the cost of raw materials. The additional 5% exercise duty will push the tax regime to unmanageable levels, making it difficult for manufacturers to remain operational.
The association is also lamenting the lack of consultation and discussion on the new tax, which was allegedly introduced without their input. This, they believe, is a clear indication of the government’s disregard for the industry’s concerns and the potential consequences of such a tax on the economy.
The plastic industry, which is a significant sector in Ghana’s manufacturing landscape, employs over 39,000 people directly and supports a value chain that employs around 3 million Ghanaians. The industry contributes significantly to the country’s economic growth, paying millions of dollars in import duties, corporate taxes, and other levies. However, the association believes that the additional tax will have a ripple effect on the entire industry, leading to increased prices for consumers, reduced production, and potential factory closures.
In a passionate appeal, the association is urging the GRA and the Ministry of Finance to convene an emergency meeting to address the impasse. They are calling on the Vice President to intervene and stem the tide, as the situation has political implications that could have far-reaching consequences.
If their plea falls on deaf ears, the association has vowed to embark on a demonstration and eventually close down their factories, a move that could exacerbate the already high unemployment rate in the country. The association believes that this will be a last resort, but one that they will be forced to take if their concerns are not addressed.
In a statement, Dr. Effah Botwe said, “We are not asking for a total exemption from taxes, but rather a suspension of the additional 5% exercise duty until a more comprehensive and inclusive approach to taxation is adopted. We are willing to work with the government to find a solution that benefits both the industry and the economy, but we cannot continue to operate under a tax regime that is suffocating our businesses.”
The Ghana Manufacturing Association’s plea has sparked concerns among industry stakeholders, who are calling on the government to reconsider the tax and engage in a more meaningful dialogue with the association to find a solution that works for all parties involved. As the situation unfolds, one thing is clear: the fate of Ghana’s manufacturing industry hangs in the balance, and the consequences of inaction could be dire.
