The Food and Beverage Association of Ghana is unenthused by the high taxes on goods and services in the country.
Executive Chairman of the association, John Awuni expressed his concerns about the excessive taxation imposed on Ghanaians, asserting that this approach is not the solution to the current economic conditions.
Mr Awuni shared his views during a discussion on Joy FM’s Super Morning Show, held on Tuesday, October 24, 2023. He highlighted that if higher taxation were the key to the country’s economic development, Ghana would have already seen substantial progress, along with a reduced cost of living for its citizens. The Executive Chairman expressed his dismay at the government’s approach, which involves keeping the tax net narrow and imposing additional taxes on those who are already compliant.
According to Awuni, this strategy is far from optimal, and he proposed alternative solutions. Among these suggestions is the expansion of the tax net to encompass a wider range of taxpayers.
Mr Awuni drew attention to the activities of the Ghana Revenue Authority (GRA) compliance unit, which he described as increasingly intrusive. “Every week, literally, the GRA compliance unit goes out officers, sometimes they go with media personnel from shop to shop, harassing people to call to collect monies. We are getting to unsustainable levels,” he explained.
The Executive Chairman emphasized the importance of turnover for businesses, highlighting that businesses profit more from high rates of turnover, which often outweigh the significance of profit margins.
“Businesses thrive on the rate of turnover, not on the profit. If you make GHs1,000 on one car that you sell, and then you sell only one car in the year and then you make GHs50 on a car and you can sell 1000 of those cars in a year, you make more money than selling one car in a year. Every business thrives on the rate of turnover. But what you observed is that over the years, Ghana has sought to raise revenue from just very few people and from increased taxes.”He noted that the current tax regime focuses on raising revenue from a limited number of individuals and relies on increasing taxes.
This approach, he asserted, impedes the development of the private sector and hampers businesses from achieving their full potential.
He urged the government to reconsider the current taxation structure, particularly the persistent imposition of the Covid-19 levy even after the pandemic has subsided. “In addition to many other taxes. We introduce COVID-19 1%… Today, COVID doesn’t exist yet government is still bent on going ahead with that level of taxation. Let me make a point that because maybe we do not have enough time, the taxes are just so numerous that we are not completed typically as businessmen as citizens, and the private sector can really not develop.”