The American Chamber of Commerce, Ghana, has always appreciated the government’s efforts to raise more revenue domestically. But as I have indicated in my new year statement, it is imperative that the government consider the impact these proposed measures will have on the cost of production, distribution, and sale of products. Some of the rate increments in the Excise Duty (Amendment) Act 2022 will hurt businesses.
For instance, the proposed 20% rate on mineral water from the previous 17.5% will lead to an increase in the cost of production, which the companies will ultimately pass on to the consumer, which could lead to a decline in sales.
Also, the proposed imposition of excise duty (20 per centum of the ex-factory price)- ‘sugar tax’ on sweetened beverages in addition to the already existing 17.5% (to be increased to 20% per the amendment) on non-alcoholic beverages will inversely impact the business of companies operating in that sector. This will lead to an astronomical increase in the cost of production, especially for companies producing both mineral water and sweetened beverages.
These increments, coupled with the country’s current economic situation, will overburden companies leading to some businesses having to make the difficult decision of laying off some workers.
We accept that the government must increase revenue and improve the health of the citizenry, but it is also in the interest of the government to protect jobs as well.
The Chamber is making this humble call before Parliament resumes sitting to allow for broader consultation with industry and other stakeholders to resolve pertinent issues before the bill is passed.
I will plead with the Parliament of Ghana and the Ministry of Finance, for a downward revision of these excise duty rates to boost investor interest, protect jobs, and ensure constant and steady revenue flows to the government.
AmCham Ghana members have significant investments and provide thousands of jobs across several sectors, and the Chamber is ready to engage authorities to find a middle ground on these issues to ensure Ghana remains a favorite destination for investors.