The Food and Beverages Association of Ghana (FABAG) is appealing to the government, specifically the Minister of Finance, Dr Cassiel Ato Forson to abolish the excise tax on fruit juices and other taxes impacting local industries.

According to FABAG, the removal of these taxes, introduced under the previous Akufo-Addo administration, is crucial for boosting domestic production and increasing tax revenue.

FABAG expressed concern over the excise tax on sweetened and fruit drinks, which, under the Excise Duty (Amendments) Act 2023 (Act 1093), has severely impacted the local manufacturing sector. The tax, which targets locally produced fruit juices and sweetened beverages, has led to a drastic decline in sales and severely hindered the industry’s competitiveness, particularly in international markets.

A recent analysis conducted by FABAG revealed that the introduction of the excise tax has resulted in a staggering 50% drop in sales. Despite expectations of increased government revenue, the tax has, in fact, led to reduced net revenue for the state, with the local industry being overburdened by a range of existing taxes.

FABAG highlighted the numerous taxes currently levied on manufacturers, including import duties, VAT, ecological levies, and multiple charges at ports and on shipments. The combination of these burdensome taxes has significantly strained the ability of the local industry to survive, grow, and compete.

The association pointed out that these taxes are contributing to forced labour retrenchments, inflated production costs, and a reduced capacity for competition, particularly with imported products.

FABAG stressed that the high taxes are wasted investment and growth in the fruit juice manufacturing sector, leading to wasted investment potential.

In light of these challenges, FABAG is calling for the immediate reversal of the excise tax, arguing that such a move would rejuvenate the local industry, lead to higher sales volumes, and result in increased government revenue.

The association stressed that the removal of this tax could also create new jobs, boost SSNIT contributions, and generate more tax payments across several areas, including withholding taxes, corporate income tax, and VAT.

FABAG expressed its willingness to support the government in achieving its economic goals and urged a re-evaluation of the tax structure to foster growth within the local fruit juice manufacturing sector.