The Executive Secretary of the Food and Beverage Association, Sam Aggrey, has criticised the import tax regime, blaming it directly for the cedi’s depreciation.
He insists that the recent signs of currency recovery mean little without a drastic overhaul of the country’s tax structure.
Speaking on JoyNews’ PM Express on Thursday, July 3, following the launch of the NDC’s flagship 24-Hour Economy policy, Mr. Aggrey warned that businesses were reeling from the compounded damage caused by fluctuating exchange rates and punitive import taxes.
“Dollar depreciation is not being felt at all, we take it from two-fold. If you look at what has been in the past, where the cedi started depreciating, from ¢3.80 up to ¢16, you can imagine how much business investors have lost, and also the country itself,” he said.
“So, for the cedi to appreciate again, you look at how much you have lost during the appreciation. So you’ve been hit with one bullet, hitting you twice.”
He said that while the cedi’s marginal appreciation may look good on paper, the benefits are not translating to relief for businesses.
“It’s a good thing too for it to happen, but then we are looking at where government will also come in, as it were, to reduce certain taxes for people to have the real feel of how much the effect of the cedi will be.
“Because, as it is now, if we say the cedi has come down, so it should take it like that, the driving force that brought about the cedi depreciating again is also appreciating. Whatever has been done to make sure that the cedi gains its strength needs to be continued.”
Mr. Aggrey said the downward spiral of the cedi was largely fueled by poor tax policy decisions, especially at the ports.
“And then you look at what about the depreciation of the cedi? It was the introduction of certain taxes and levies at the port. That is where you really see the effect.”
He recalled a meeting with former Finance Minister Ken Ofori-Atta and how warnings from the business community were ignored.
“I remember we met Ken Ofori-Atta when he said he was going to go the full recovery, 100% of the benchmark value.
“We told him, ‘Look, this will be a disaster for this country, so take it easy, let the cedi remain where it is’. Because the very moment you increase, you see the cedi also driving itself without any push, it will start depreciating further.”
“At that time, when it was going to do that, the cedi was around ¢11 to a dollar, but he didn’t listen, and he went up to increase certain taxes, and that brought about the high import duties and all that.
“So we realised that the cedi would not stay where it was. And then what happened? We started losing money in this area.”
Mr. Aggrey insisted the country must now take “another step back or step forward” and slash the excessive levies businesses face.
He decried the sheer number of taxes slapped on single items.
“There are almost 21 different taxes that are imposed on one item. So we want an overhaul of the tax system to bring us some relief.”
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