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11.10.2005 Business & Finance

Ministry of Trade makes efforts to minimise taxes

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Accra, Oct. 11, GNA - The Ministry of Trade and Industry is looking at ways to minimise taxes imposed on the industrial sector which are making their products less competitive to those imported into the country.

It has begun collating ideas and suggestions from stakeholders in private industries as an input in the 2006 budget and to review some of the taxes especially the Value Added Tax. Mr Kwadwo Baah-Wiredu, Minister of Finance and Economic Planning, who chaired a forum for industrialists in Accra, said there was the need to review the law on the Value Added Tax (VAT) to make it more responsive to current needs.

He said since the law was passed eight years ago, it had not been refined yet there were new technologies and practicalities coming up which called for an adjustment.

Mr Baah-Wiredu said the old budget was inconclusive taking into consideration new trends in the industrial sector. He said though some of the issues raised might have been captured in the previous budgets, a task team had been set up to ensure that all other issues that were not captured were all represented.

The Minister noted that the Ministry of Finance and Ministry of Trade and Industry were working to ensure that corporate tax, which stood at 28 per cent, would be reduced to 25 per cent by 2007. Mr Baah-Wiredu said though stakeholders in the industrial sector complained of high tariffs, it should not be the basis for under-invoicing or over-invoicing since tariffs were critical to the growth of industries in Ghana.

He said about 500 million dollars to 800 million dollars were being siphoned from developing countries due to this practice and urged participants to desist from it.

Mr Alan Kyerematen, Minister of Trade and Industry, said the forum, also to make inputs into the new industrial policy, would provide an opportunity for industrialists to find concrete solutions to problems facing the sector.

He said he was aware of complaints of high taxes on Made-in-Ghana goods that had been a hindrance to their competing effectively with the outside world and gave the assurance that the Government would do all in its power to make taxes more reasonable. The participants at the forum, most of who were representatives of private manufacturing companies, urged the Government to reduce the tariffs on the industrial sector since that had made their products uncompetitive.

They said most industrialists had gone into importing rather than manufacturing, as they could not afford the high tariffs. The participants called on the Government to use about 60 per cent of the budget for the informal sector since it was the only way to develop the rural areas to reduce poverty.