The chamber of agribusiness Ghana and other agriculture value chain groups are demanding that the minister for finance immediately grants tax exemptions for agricultural commodities.
The group says any further delays in granting the request by the minister of food and agriculture could plunge the country into a serious food crisis as imports have been locked up at the ports over increases in taxes
The group comprises members and management of CropLife Ghana, Chamber of Agribusiness Ghana, Peasant Farmers Association of Ghana (PFAG), Benfronics Agro-chemicals, National Seed Trade Association of Ghana (NASTAG), rainbow agrosciences company limited, and Ghanarice Interprofessional body.
They are worried by the delay of Minister of Finance and Economic Planning in granting tax exemptions for agricultural commodities as requested by Minister of Food and Agriculture.
They therefore demand that; the Minister of Finance, as a matter of urgency speed up in granting the request by the Ministry of Food and Agriculture and grant exemptions to the agricultural commodities as captured in the application letter.
This decision should be taken immediately without any further delay, as international prices of these goods might escalate if we continue to wait.
That the Government and Parliament take a second look at the Exemptions Act with the view to amend it and specifically include agricultural goods and equipment in the list of exemptions.
They maintained that the decision to have agricultural commodities being considered as general goods and green discretion to a sector minster is a dangerous Move which might not auger well for the sector
Full statement
This delay has a dire consequence for the sector which is already fragile due to global Price increases in agricultural machinery and agri-inputs leading to the high cost of production and could further worsen the food security situation in the country going forward.
The President on 12th September 2022 assented to the Tax Exemptions Act 2022, Act 1083 while is meant to regulate the application of tax exemptions and create an exemptions regime for goods imported into the country.
Whiles we laud attempts by government to streamline tax exemptions and rake in more revenues to develop the country, agricultural goods and equipment are not included in the list of items exempted from import duties.
This decision by government to specifically exclude agricultural goods in the first is shocking and contradicts the government’s own policy of transforming the economy through agricultural transformation.
Fortunately, to compensate for the omission, the Act allows the Finance Minister to grant industry-specific exemptions based on recommendations of the respective sector Minister with cabinets approval.
Given the critical nature of agricultural and agribusiness activities in the country, on 10th January 2023, the Minister of Food and Agriculture applied for exemptions for agricultural commodities.
Whiles we still await decision of the finance ministry and government to grant the request, our clients and service providers have their good currently locked up at the ports due to exorbitant charges slapped on them by way of import taxes,
For instance; one of our service providers that has livestock vaccines valued at 420, 000 cedis in import was asked to pay 330,000 cedis as it no longer attracted exemptions.
Due to this, the company immediately halted the shipment and asked for an extension hoping that Minister of finance would have granted the exemptions.
There are several importers who are unwilling to make import the required agricultural inputs in an attempt
to contribute to growing agriculture is Ghana due to this development and farmers are already experiencing limited access to such inputs in one way or the other.
This development has dire consequences for the sector which is already battling with high input and machinery cost partly attributed to the Russian-Ukraine conflict, high cost of shipment, depreciation of the cedi and high transport cost associated with high fuel prices.
On average, most farmer in 2022 produced at a loss, some have to scale down their production and others sought for alternative businesses due to high cost of production.
A situation leading to low food supply, high food prices contributing to record high inflation of 54% in December 2022.
This situation will be compounded if taxes are further imposed on agro-based products.
Again, this action defeats government’s own efforts to anchor the country’s developmental agenda on agricultural transformation.
The government is investing in input subsidies, extension services: research and market support system and encouraging the youth and private investors to engage in agriculture.
The current situation will therefore be counterproductive to governments’ own efforts as high cost will scare investors from a sector that is already overburdened with risk and uncertainties.
Furthermore, most agro-based industries are shrinking and others are folding up due to high Cost of raw-materials. Government should rather be interested m policies and actions that reduces cost of doing business in the agricultural value chains rather than counterproductive policies like import duties on agro-products.
By Peter Quao Adattor
