GFL frowns on introduction of excise tax on bottled water

The Ghana Federation of Labour (GFL) has frowned on the introduction of the 20 percent excise tax on bottled water and fruit drinks.

Members of the GFL see this as an unfortunate attempt by the Government to further hype the operational costs of local manufacturing businesses.

The federation registered its protest against the introduction of the tax in a petition jointly signed by the General Secretary of GFL, Mr Abrahm Koomson, and President Mr Caleb Nartey in Accra.

"We find the introduction of this new tax regime inimical to the growth of the economy as it undermines job creation and denies the State of the required revenue," the statement said.

Below is the full statement:

PETITION AGAINST NEW EXCISE TAX BILL ON PRODUCTION OF LOCAL FRUIT DRINKS AND BOTTLED WATER

The attention of the Ghana Federation of Labour (GFL) has been drawn to a new Tax Bill in the offing seeking to introduce a 20% EXCISE TAX on locally produced Fruit drinks and bottled water.

A draft of the Excise Duty Amendment Bill, 2022 seen by our members, according to the framers, seeks to amend Excise Duty Act 2014 (Act 878) to revise the Excise tax rates for a number of products including all sweetened drinks and processed fruit juice which hitherto did not attract Excise duty.

Members of the GFL see this attempt by the Government to further hype operational costs of Local Manufacturing businesses unfortunate.

We find the introduction of this new tax regime inimical to growth of the economy as it undermines job creation and denies the State of required revenue.

The survival of the local industry is already threatened by the increased cost of production and the dwindling purchasing power of consumers.

Just last week, the Bank of Ghana (BoG) in its determination to fight inflation, which stands at 54.1% as of December 31st 2022, increased its policy rate to 28%.

This obviously means a higher cost of borrowing.

Again, Value Added Tax has gone up by 2.5% alongside the BoG recent Policy thereby suffocating Manufacturing companies in the Country.

Rt. Hon. Speaker, whilst Organised Labour’s expectation of well-crafted policies to protect Local Industries, Government has rather slapped an astronomical 30% increment in Electricity tariffs and about 50% on water for Industry effective 1st February 2023.

Rt. Hon. Speaker, there is every reason to appreciate Government’s determination to raise revenue to meet its statutory obligations, however, at this stage of the economic crisis facing the Country, and when there is uncertainty about investments in bonds ahead of an agreement on the Domestic Debt Exchange Programme, the introduction of such tax is not going to be healthy for the Manufacturing Industries.

Fuel prices still remain high and there is no clear sign about a downward trend as the Cedi continues to depreciate against the dollar.

The Ghana Federation of Labour constituted by fourteen (14) Trade Unions including the underlisted Organisations vehemently oppose the Excise Duty Amendment Bill, 2022 in its current state;

- Textile, Garment and Leather Employees Union (TGLEU)

- Food and Allied Workers Union (FAWU)

General Manufacturing and Metal Workers Union (GEMM)

- National Union of TEAMSTERS and General Workers (NUTEG)

- Union of Education, Agricultural and General Workers (UNEAGES)

- Bogoso Gold Enterprise Based Union (BGEBU)

- ICT & General Services Employees Union (ICT – GSEU)

- Financial, Business and Services Employees Union (FBSEU)

- National Union of Agricultural Development Bank (NUadb) Senior Staff

- Chirano Gold Mines Senior Staff Union (CSSU)

- Senior Staff Association of Judicial Service of Ghana (SSAJUG)

Amalgamated Labour Reform Union (A’LU)

We cannot afford to sit on the fence and watch our members reel under the ever-mounting TAXATIONS on local Manufacturing Industry.

Companies have drastically reduced staff and we cannot wait for many more fold ups.

Rt. Hon. Speaker, we make a passionate appeal to you and rely on your high office to consider the plight of workers and act to save the precarious situation since there weren’t broader consultations with stakeholders prior to the presentation of the Bill to Parliament.

We look forward for engagements to clarify our position and pray your good office, together with Parliament as a whole to consider this serious threat to the economy to save the current situation from getting worse.

Meanwhile, we appeal for stay of passage of this Bill pending exhaustive consultation with stakeholders.

Yours sincerely,

FOR: GHANA FEDERATION OF LABOUR