The General Agricultural Workers Union (GAWU) has downplayed fears that the introduction of taxes on certain subsectors of the agric sector will have serious consequences on agriculture.
[contextly_sidebar id=”9iSBlnZNCgvRhVVyxl3KjZfsUqGDdYdS”]The comments follow the implementation of the new income tax law.
Per the new law, agro processing businesses which are conducted wholly in the country and prior to the new law had a 5 year tax holiday, will pay 1 percent tax during the 5 year tax holiday and subsequently pay the standard 25 percent corporate tax.
The same goes for cocoa by product business conducted wholly in Ghana as well as business in tree crop farming that is those in coffee, oil palm, shea-butter and coconut as well as cash crop or livestock excluding cattle.
Tax analyst Abdallah Ali Nakyea fears the new will have a negative impact on the agric sector.
“There were sectors that were enjoying the tax holidays completely like the agro processing sector; cattle rearing, tree crops, you had ten years tax holiday now if you look at this new law, whoever used to enjoy these tax holidays will be required to pay one percent. This figure may not be significant in terms of a thousand but the same is huge in terms of hundreds of thousands and it will have an impact on those expected to pay.”
But General Secretary of the General Agricultural Workers Union, Edward Kareweh tells Citi Businesss News the move will not be inimical to the sector.
“…The taxes are minimal; one percent and so on…. will investors necessarily move away from the sector because of the minimal taxes or will the economy would have been better off without placing those taxes in terms of the returns that will come from the sector. So it may not necessarily be inimical to the agricultural sub sector but we will need to look at the fundamental problems of the sector which relates to production cost, credit, post harvest losses, among others.” He observed.
By: Vivian Kai Lokko/citifmonline.com/Ghana