The President of the Foods and Beverages Association of Ghana (FABAG), John Awuni, has raised concerns over the migration of multinational companies to neighbouring countries.
Numerous multinational companies have relocated from Ghana to other countries, attributing their moves to high taxes and operational costs. Companies that have left Ghana include Glovo, Dark and Lovely, Nivea, Jumia Foods, Bet 365, Bic Pens and others.
In an interview in Accra, Mr. Awuni called on the Akufo-Addo government to urgently revise its tax models to prevent Ghanaian companies from folding up.
He underscored the difficulties businesses face due to high taxes, stressing that the current tax system could impede the private sector’s progress.
The FABAG President lamented the economy’s lack of growth if taxes are not minimized, noting that the private sector is unable to create jobs due to unprofitability.
He said more companies are in the offing of relocating from Ghana.
“More companies have left the country than has been announced. I have talked with them one-on-one and many of them have opened satellite offices in Cote D’Ivoire and Togo. There are some products which are from Nigeria, Togo, and Cote d’Ivoire, this is real. Clearly, the model the former finance minister Ken Ofori-Atta kept building was not meant for any economy to develop and stand and do well. It was a tax upon tax.
“They [government] need to re-look at the tax system, they need to re-engineer our tax system to give room for the private sector to make savings, expand and create jobs. We’re in an election year, and the model this economy is building on is not a model that will let the private sector develop to create employment or make the economy expand. The government must reduce their tax system.”
He described as “unacceptable” the practice of forcing companies to pay taxes on their losses.
“Growth and Sustainability Tax, you say that a company that posts account losses for five years or more should pay tax on their losses, where is it done at all? It’s quite annoying, it’s clearly unacceptable. At the end of the day, it’s better for him [company] to exit. We think that the Ghanaian economy will suffer more because many businesses still want to leave [relocate].
Mr. Awuni also criticised the high cost of living, which he believes is adversely affecting businesses.
“We have poor patronage, consumers are not buying, they do not have excess money to buy. The issue is the high cost of living which translates negatively on the businesses because you cannot produce more.
“The cost of doing business is very high whether imported or exported. We have many businesses closing down; how can people prefer Togo to Ghana? They must look at the cost of living for the ordinary Ghanaians which is extremely high and unbearable.”
