Check exchange rate, abolish some taxes — GUTA
The Ghana Union of Traders Association (GUTA) says they expect government to create policies that will stabilise the exchange rate in next year’s budget which is expected to be unveiled in parliament on November 15.
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They also want an elimination of the two percent special import levy, the covid 19 health levy and what they termed as some nuisance taxes at the ports.
“Ghanaian businesses are overly saddled with taxes, we also have to contend with high interest rates, aside that we are being consumed with inflation,we want the 2024 budget to address this,” Dr Joseph Obeng , GUTA President told the Graphic Business in an exclusive interview in Accra last Wednesday.
He noted that cost of borrowing has risen and many members of his outfit are reeling under the cost of borrowing forcing them close their businesses.
Competition
Dr Obeng noted that GUTA is not competitive in the sub-region because of the hefty taxes it is bedeviled with; a phenomenon he says forces members to be non-compliant.
“We need to simplify our tax system, prune down the number of taxes we pay here, and make payment of taxes manageable and affordable so that businesses can also thrive and productivity will be enhanced,” he stated.
Restructure VAT
Dr Obeng urged government to restructure the Value Added Tax (VAT) system to ensure the same rate is paid across board. He bemoaned the tendency where some businesses pay a rate of 22 percent, others a rate of 4 percent while others are exempted from paying because of not meeting the threshold of GHC200,000 worth of goods as unfair and unjustified.
“The consumer has the discretion of buying what he or she wants, the one paying 22 percent VAT and those paying 4 percent VAT stand at a disadvantage since their goods are likely to be priced high while those not paying any VAT at all sell at affordable prices and are able to make good sale,” he noted.
Expansion of the tax net
Dr Obeng urged government to widen the tax next to rake in revenue from businesses who hitherto do not pay taxes. According to him this will enable government harness enough revenue for national development.
“We need to find innovative ways of bringing a lot more people to comply with their tax obligations, failure to do that enforces discrimination,” he stated.
He urged government to re-introduce the road tolls, seal leakages in the system and the curb the abuse of the free-zones and warehouse policy to fulfil it tax obligations.
Protest
Last month GUTA urged its members in Accra to close down their shops from to protest against rising inflation, depreciation of the Ghana Cedi and high lending rate due to an increase in the policy rate by the Bank of Ghana.
According to the association, the closure of shops was necessitated by the government’s failure to address the concerns of traders after weeks of engagements.
Dr Obeng told this paper that the government has failed to move from taxation to production as it promised in 2016.
“It is not in our interest to increase prices, if prices are high it means the purchasing power of the consumer has been reduced, that is inimical to the growth of business, it is incumbent on the government to create an enabling environment for businesses to thrive,” he stated.
He revealed that GUTA members go to Togo and Nigeria to purchase goods to be sold in Ghana, citing the low cost of doing business in those countries compared to Ghana.
He appealed to government to abolish the many burdensome taxes at the ports to enable businesses to thrive.