ModernGhanalogo

FEATURED: The Bushy Roads In The City Of Accra: Who Is Sleeping On The Job?...

body-container-line-1
19.03.2008 Business & Finance

Companies Cry For Help

By Daily Guide

The Sekondi-Takoradi Regional Chamber of Commerce and Industry (TRCCI) in collaboration with the Business Sector Advocacy Challenge Fund (BUSAC), has called on government to extend the payment of taxes of all manufacturing companies for at least, one year, due to the energy crisis experienced last year.

At a day's workshop in Takoradi, the two bodies said such a move will allow the companies to recoup losses made during the period; otherwise their taxes would have to be paid out of capital.

They contended that the power crisis affected their business operations negatively which resulted in capital losses.

Currently carry-over losses apply to manufacturing companies producing mainly for export, farming enterprises, tourism, agro-processing and information and communication technology companies.

Speaking at the workshop, Awuku-Dako, a tax consultant noted that the country's corporate formal sector is over-burdened with taxes which make the cost of doing business expensive.

He called on government to find a way of lessening the burden of taxes on businesses especially those in the manufacturing sector.

Some members of the Chamber argued that the energy crisis, which the country experienced between August 2006 and September 2007, created a situation where workers reported to work and were unable to work due to power outages. In this situation, workers on fixed income were paid for doing nothing.

The workshop, funded by DANIDA, DFID and USAID, was attended by over 100 of its members made up of captains of industries within the Western Region.

This is in line with the Chamber's policy advocacy programme aimed at lobbying government for an enhancement of tax incentives for accelerated growth by applying loss carry-over for all companies.

Businesses, during the eleven-month energy crisis, paid more than $62 million a month to supplement power.

The mining sector alone spent $17.4 million monthly on energy, making it the worst-hit sector by the crisis, while industries in the manufacturing sector spent $50,000 per firm.

An official at the Tax Policy Sector of the Ministry of Finance and Economic Planning in an interview said the call on government to extend the carry-over losses is laudable for business growth but was quick to add that its implementation will not be immediate.

He said the process demands a comprehensive stakeholders' input and Parliamentary debate before it becomes a nationally acceptable policy.

The Supreme Military Council Decree (SMCD)5 (Amended) section 4A1995 on carry-over losses stipulates that enterprises established in Ghana are entitled to deduct any losses incurred from the accessible income of the first five years immediately succeeding the year in which the losses were incurred.

body-container-line