AGI Wants Tax Differentiation
The Ghana Association of Industries (AGI) has called on the government to consider introducing what it referred to as “discriminatory tax incentives” that would give tax breaks to corporate institutions which employ more staff and pay the relevant tax and social security contributions.
Such an initiative, according to the association, will help generate employment creation and poverty reduction in the long run.
The President of the association, Nana Owusu Afari, made the call when he briefed the media on AGI’s reaction to the 2012 Budget and Economic Policy Statement of the government presented to Parliament last two weeks.
To Nana Afari, “the government must consider making a direct linkage between employment generation and poverty reduction.
“Accordingly, a discriminatory tax incentive may be employed so that employers who increase a requisite number of staff and pay the relevant tax and social security contributions enjoy better corporate tax incentives.
While commending the government for increasing the VAT threshold from GH¢90,000 to GH¢120,000, the AGI president said “the current six per cent flat rate of tax imposed on Small and Medium Enterprises (SMEs) places a huge tax burden on businesses that fall in this bracket and must be reconsidered.
The association, he said was also worried over the poor growth rates recorded by the manufacturing sub-sector over the past years.
For the past three years, growth in the manufacturing sub-sector has averaged at 0.5 per cent as against the 2.3 per cent average recorded in the past ten years; a trend Nana Afari said was disturbing.
Giving the various employment opportunities that the sub-sector held, the president said “clear policies and strategies need to be developed to ensure revamping of the manufacturing sector.”
He hoped that the implementation of the various policies outlined in the Industrial Policy and the Private Sector Development Strategy II would help improve performance in the manufacturing sector.
On the whole, Nana Afari said “the budget has a positive outlook and the AGI is looking forward to working with the government in the spirit of public-private partnership to ensure that the various private sector policies are successfully implemented for the growth of the economy as a whole.”