Tax Stamp: Two Companies Shut Down, More To Follow

More businesses which are affected by the excise tax stamp policy are to shut down their operations in the coming weeks over high cost of operation.

The situation is expected to lead to possible shortages and eventual increase in prices, if authorities fail to step in.

The warning is the latest from the Food and Beverage Manufacturers’ Association of Ghana.

It also comes after the closure of two companies; Aqua Fill and Multi pac producers of bottled water and fruit juices respectively.

The Executive Secretary of the Association, Samuel Aggrey tells Citi Business News the members have been overburdened with the latest directive hence the action.

“Unfortunately government is not heeding to that and is still standing on its position expecting that people should invest between one hundred and fifty thousand and millions of dollars to get these machines installed,”

“…If I don’t have the resources to install those machines then I will be found wanting by the law. The two companies that have shutdown have done so until they have their way clear. I can tell you that others are waiting to follow suit because no company would want to be found wanting.”

Meanwhile Mr. Aggrey has also not ruled out possible increase in prices of some products due to the cost in fixing the stamps at the designated centers.

“Because we don’t have the machine, you need to transport your wares from you factory wherever you are in the country to Tema for them to fix the stamps for you. When you get to Tema, the facility can only accommodate a 20 footer container that can only work for about 6 hours a day. So you can just imagine the number of containers that will be lined up to get this facility to get their stamps affixed. So if their going by rationing, the competition that will be created between these industries will be huge,” he lamented.

The enforcement of the excise tax stamp has been in operation since March 1, 2018.

According to the Ghana Revenue Authority, the decision is to deepen compliance with tax payments and combat tax evasion.

The development has also been viewed by some as means by the government to shore up its revenue following the revenue shortfall it recorded in 2017.