Civil Society Organisation (CSO), SEND Ghana has called on government to provide tax relief for Ghanaian startups in cocoa processing.
This came out of “A Roundtable Discussion on Tax Regulation In The Cocoa Sector” in Accra on Tuesday, May 21.
This is in line with the Ghana Cocoa Board’s (COCOBOD) call for the scrapping of the 35 per cent tax on small and medium-scale cocoa processing companies.
The tax known as import duty, has been described as a disincentive to cocoa processing startups and small and medium-scale enterprises (SMEs); and as such, could erode gains in promoting local value addition.
SEND Ghana’s Roundtable Discussion forms part of activities under an OXFAM-funded project titled “Fair for All” which seeks progressive fiscal, tax, and value-chain regulations and for government to increase political will for inclusive, transformative development.
Speaking to journalists on the sidelines of the discussions with various stakeholders in the cocoa sector, SEND Ghana Project Officer Joseph Okyere Osei stressed the need for government to support indigenous Ghanaian companies venturing into cocoa processing.
“When it comes to value addition in the cocoa area there are a lot of small companies that are coming up trying to enter that space but because of numerous taxes; production tax, Value Added Tax, that are stamped on these companies, they are not able to thrive. So we feel that government should give these companies some relief that will help them.
“Compared to the big companies in the free zones, these companies that are coming up should have more government backing so that they can have the wings to also fly,” Joseph Okyere Osei said.
The Founder of Cocoa Mmaa farmers' cooperative, Leticia A. Yankey also emphasised the need for government to support local cocoa processing companies.
She indicated that government must consider completely exempting indigenous companies from taxes for a period just as is done for companies under the free zones to help them compete with international and already established companies in the processing sector.
“They [local cocoa processing companies] must be tax exempted. Even if not fully exempted they should get some relief that will help them to compete favourably with existing companies,” Leticia A. Yankey noted.
She urged cocoa farmers to form partnerships and build their capacities to have the ability to enter into the processing business.
As a cocoa farmer herself, Leticia A. Yankey stressed that this is the sure way cocoa farmers can thrive in the processing sector.
Joining the conversation, Executive Member for Cocoa Farmers Cooperative Association of Ghana, Issifu Issaka, opined that it would be out of order for government to say it wants to tax cocoa farmers.
“If you look at the cocoa industry, it’s such that farmers pay for other services so mostly the farm gate prices that are given to the farmers, they are worth it
“So I don’t see why farmers should pay extra money as tax apart from what they are contributing to the country already,” Issifu Issaka.
He said cocoa farmers should continue to enjoy tax exemptions as they have for decades under successive governments.
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