Stakeholders in Ghana’s private sector have indicated that any attempt by government to increase taxes would be murderous due to the power challenges bedeviling the sector.
Nana Osei Bonsu, Chief Executive Officer of Private Enterprises Federation (PEF), told journalists in Accra that there was no need for any increases because most businesses were currently struggling as a result of several challenges.
According to Nana Bonsu, increases in tax would intensify the affliction of industry and bleed players to death.
The power outage, he said, was prohibiting productivity and reducing the private sector’s ability to compete.
Also, companies in Ghana are suffering from water rationing and high interest costs.
The PEF boss said that government did not consult the private sector before increasing taxes.
“No matter how much taxes you add, the private sector cannot increase tax payments.”
Recently, government proposed increases in excise duties following a special audit of some companies as well as an appraisal of charges on some services. Government is also said to be preparing to put a levy on imports and the annual profits of some businesses.
The PEF boss proposed other areas that government could explore to increase its revenue since the country’s tax revenue is only about 14.9 percent of GDP.
Describing the country’s tax revenue as one of the lowest in the sub-region, he stressed the need to prioritize government projects since its budget cannot meet all at the same time. He also said revenue must be mobilized efficiently.
The total revenue targets for the first quarter of this year was GH¢6.3 billion below government’s target of GH¢6.4 billion.
The latest survey carried out by the Association of Ghana Industries (AGI) on private businesses for the first quarter of this year has pinpointed poor power supply as the leading obstacle restricting the growth and start-up of businesses in Ghana.
Such disruptions, the AGI discloses, led to shortfall in production and revenue losses to businesses which are unable to procure generators to continue operations.
On the other hand, the power cuts lead to increased cost of doing business as companies, which could afford, invested in contingency plants/generators and fuel to undertake normal operations.
“Either way, regular power cuts as being experienced in the country limits industry’s international competitiveness.”
Over the last three quarters, poor power supply is the topmost challenge restricting growth of businesses.