The Food and Beverages Association of Ghana recently highlighted the issue of exorbitant indirect taxes and levies imposed on basic goods, stating that Ghanaian consumers are heavily burdened by these charges. In a press statement, the association revealed that various taxes imposed by the government lead to prices that are up to 100% higher for consumers.
The statement provided examples of shockingly inflated prices caused by taxes. For instance, a tin of evaporated milk priced at ¢8.5 before taxes ends up being sold at ¢15.5 after taxes, reflecting an 82% increase. Similarly, the cost of a bottle of beer rises from ¢5 to ¢11 after taxes, representing a 120% surge. Basic commodities like spaghetti (110% increase), tin tomatoes (86% increase), 50kg bags of rice (100-120% increase), and local chicken (130% increase) also experience astronomical price hikes due to taxes.
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Other goods affected by substantial tax-related price inflation include cooking oil (120% increase per box), used gas cookers (88% increase), canned sardines (109% increase), and car batteries (100% increase).
The excessively high taxes result in basic necessities such as a bag of rice surpassing the entire monthly salary of low-income earners such as waiters and drivers. The Executive Chairman of the Association, John Awuni, warned that these high taxes have a negative impact on businesses and the overall economy. Reduced demand resulting from high prices leads to lower sales volumes and production, which hampers business growth and decreases government revenue.
Mr. Awuni advocated for significant tax reductions and the cancellation of certain taxes in the 2024 fiscal year budget. He argued that these measures would enhance private sector performance, stimulate higher demand and sales, and address the stifling effects of the current taxation policy. He further noted that the current situation makes smuggling a more attractive option.
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Addressing the concerns raised by the Food and Beverages Association of Ghana is crucial for ensuring affordability and accessibility to basic goods for all citizens. A balanced taxation policy that supports economic growth and encourages consumer demand is essential for fostering a thriving business environment and enhancing the well-being of the population.
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