Ghana: Tax relief for brewery industries

Posted: September 11, 2012 in Economic Reporting
Tags: , ,

Minister for Finance & Economic Planning, Dr. Kwabena Duffour.

The Ghanaian brewery industry has been granted tax relief but under a condition of using a high percentage of local raw materials in their production.Companies that comply with the above mentioned condition would pay significantly lower ad-valorem Rates of Duty than those who use high percentages of imported raw materials.

The condition was given a legal backing following the passage of the Customs and Excise (Duties and other Taxes) (Amendment) Bill, 2012 by Parliament last Friday.

The purpose of the bill was to impose excise duty on a sliding scale on brewery companies which use local raw materials as substitutes for their imported raw materials for this manufacture of excisable goods.

The move was to honour the government’s pledge in its 2012 Financial Policy Statement to grant reduced excise tax on a sliding scale to companies which use local raw materials as substitutes in the production of excisable goods.

In presenting the report of the Finance Committee on the Customs and Excise (Duties and other Taxes) (Amendment) Bill, 2012, Joseph Yieleh Chireh who is a friend to the committee told the House that the move by the government would progressively expand the local production of raw materials including sorghum and cassava which would in turn increase demand and provide a ready market and a steady income for farmers.

According Mr. Chireh, the move would also reduce demand for foreign currencies by the breweries which require foreign currencies in huge amounts to import raw materials.

Commenting on the initiative, the Member of Parliament for Nabdam, Moses Asaga urged the government to beef up its effort in strengthening the financial might of out-growers to enable them sustain their business in producing more raw materials to feed to the local industries.

Some MPs encouraged by the Bill, expressed the view that a comprehensive approach should be adopted by the government to include products such as cement in the initiative so as to provide a holistic national approach to the promotion of local raw materials.

 

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Comments
  1. madinghana says:

    for the love of God! just how is the government to drastically reduce poverty if they grant tax breaks to this lucrative sector. The industry should be using local materials any ways as they create more jobs in the agricultural sector.

    The Ghana Hotels Association has been pleading with government for tax breaks for the hospitality industry…maybe we’ll get them if we smile at our tourists…..

    Like

  2. madinghana says:

    Reblogged this on MADinGhana’s Blog and commented:
    Check out my comment at the end of the post.Note a decision like this reminds me of the book by Paul Collier entitled The Bottom Billion: Why the Poorest Countries are Failing and What can be done about it where he details four development traps, one being poor governance in small countries…

    Like

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