An already beleaguered local private sector is smarting under new higher taxation brought on by the rapidly depreciating cedi as well as hidden administrative charges, industrialists have disclosed.
Consequently, a waning of confidence in the economy among CEOs has led to a dip in the Association of Ghana Industries Business Barometer Indicator, to 24.0 in the first quarter of 2012 from 30.0 in quarter four of 2011.
President of the Association of Ghana Industries (AGI), Nana Owusu-Afari, noted that duties on imported raw materials are calculated in US dollars; consequently, with any depreciation in the cedi manufacturers effectively pay more duties even at the same level of duty rates.
Since January this year, the value of the cedi has eroded by over 12 percent against the US dollar. Presenting the AGI Business Barometer for first quarter of 2012, Nana Owusu-Afari said it is a worrying development that high level of taxation has shot up to the number-one position as the most inhibiting factor to business growth.
High level of taxation was a distant fourth among the top-10 challenges confronting businesses in the last quarter of 2011.
Businesses in Tema, the country�s industrial hub, have also complained about a number of administrative fees and charges which were hiked up and further burdened them financially.
�The EPA (Environmental Protection Agency) fees have been raised from GH�5,000 to GH�7,500. Additionally, we received our withholding tax payback within two to three months previously; now it is over six months and such situations affect our operating cash position, all translating into hidden costs,� an industrialist from Tema told B&FT.
�There is a need for discrimination in taxation,� Nana Owusu-Afari said, adding that a significant number of local enterprises are at risk without such policy interventions.
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