GFL opposes planned taxes and utility tariff hikes, warns of economic impact

The Secretary General of the Ghana Federation of Labour (GFL), Mr. Abraham Koomson, has criticised government's planned introduction of new taxes and levies, warning that the measures could undermine industrial growth, reduce consumers' purchasing power, and worsen the economic burden on workers and small businesses.

Speaking to The Modern Guide in Tema on Sunday, Mr. Koomson described the proposed taxes as "nuisance taxes" that unfairly shift the cost of inefficiencies within the public sector onto businesses and ordinary Ghanaians.

He also rejected the Public Utilities Regulatory Commission's (PURC) decision to increase electricity and water tariffs effective July 1, 2026, describing the adjustments as unjustified.

According to Mr. Koomson, the federation has serious concerns about the government's tax policy, particularly the proposed fumigation levy, the Import Declaration Form (IDF) levy, and the cargo levy.

“Increasing tax burden on businesses and consumers is becoming a major challenge for economic growth and job creation. Government must carefully reconsider any plans to introduce new taxes or levies, particularly nuisance taxes that further increase the cost of doing business in the country,” he stated.

He argued that taxation should promote economic productivity, protect jobs, and encourage investment rather than increase production costs and weaken the competitiveness of local industries.

Mr. Koomson maintained that imposing additional levies on imports, production inputs, and logistics would inevitably raise operating costs for businesses, forcing manufacturers either to reduce their workforce or transfer the additional costs to consumers through higher prices.

Beyond concerns about taxation, the GFL Secretary General questioned the transparency surrounding the collection and utilisation of revenue generated from some levies.

“We do not even know who benefits from the revenue generated through these taxes. Our information is that there is a cartel behind this perceived government policy, and the state is not directly benefiting from it,” he alleged.

He warned that if workers and small businesses continue to pay higher taxes without corresponding improvements in public services, while revenues are allegedly diverted to private interests, the tax system would become unfair and counterproductive.

Meanwhile, the PURC has announced a 3.49 percent increase in electricity tariffs and a 0.85 percent increase in water tariffs under its latest quarterly tariff review.

According to the Commission, the adjustments are necessary to account for inflation, exchange rate movements, and rising electricity generation costs while ensuring the financial sustainability of the Electricity Company of Ghana (ECG) and the Ghana Water Company Limited (GWCL).

However, Mr. Koomson argued that consumers should not be required to bear the cost of operational inefficiencies within state-owned utility providers.

Citing research conducted by the GFL, he claimed that approximately 35 percent of electricity consumers do not pay for the power they consume and that inefficiencies within ECG significantly contribute to the need for tariff increases.

“Consumers and businesses should not be made to bear the cost of inefficiencies within state institutions. This situation threatens industrial growth, as manufacturing industries are already overburdened with high production costs,” he stated.

The GFL is therefore urging government to adopt policies that prioritise efficiency, transparency, and productivity, while protecting industries, preserving jobs, and ensuring that the cost of economic reforms is not unfairly transferred to workers and businesses.