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Organized Labour says high cost of production affecting local manufacturing industry

Mr Abraham Koomson
Mr Abraham Koomson

Mr Abraham Koomson, General Secretary of the Ghana Federation of Labour, says the high production cost is affecting the local manufacturing industry and pragmatic policy shift is required to save investors.

He said most of the companies were operating just along or below operational capacity.

“Investors’ investments continue to depreciate on the daily basis due to the current economic crisis, the manufacturing industry needs the government to reduce their burden, and not to overload them with more taxes,” Mr Koomson said.

Mr Koomson noted, at a Ghana News Agency Dialogue on “measures to secure the economy without sacrificing the manufacturing sector” that, even though taxes play a role in advancing economic growth, recent tax increases were too much of a burden on investors.

He said the taxes had a negative effect on industry and the private sector as most were unable to meet their tax obligations to the state and contribute to the sustainable development of the country.

Mr Koomson added that the new excise duty on products would collapse the manufacturing companies and lead to unemployment.

He said: “If the proposed amended excise duty bill goes through in parliament it will impose an additional tax burden on the products of the local industries with the tendency to destroy the industries and will complicate issues for Ghanaians.”

He noted that over 14 taxes imposed on the importation of raw materials were crippling the manufacturing sector and called on the government and the Ghana Revenue Authority (GRA) to consider removing some of the taxes on the importation of raw materials for the manufacturing industry to survive.

Some of the taxes on the raw materials include Import Duty, Import Value Added Tax (VAT), National Health Insurance Levy (NHIL), Covid-19 Levy, GETFund Levy, Net Charges, ECOWAS Levy, and Shippers Levy.

Others are the Disinfection Fee, Ministry of Trade and Industry (MOTI) E-One District One Factory Fee, Inspection Fee, African Union Levy, Special Import Levy, and EXIM Levy.

He described the Excise Duty Amendment Bill 2022 currently before Parliament as an “anti-manufacturing sector policy” and called on the legislature to halt the process of its passage.

Mr Koomson reminded the government that with such huge taxations, manufacturing industries could not produce at competitive prices or break even, leading to most of them shutting down their operations.

“If nothing is done about it, it will wreck the whole system and unemployment will continue to increase,” he added.

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