The Association of Ghana Industries (AGI) has begun discussions with the Ministry of Finance to resolve a tax dispute involving Accra Brewery Limited (ABL), warning that the matter could have broader implications for manufacturers in Ghana’s alcoholic beverage industry.
AGI Chief Executive Officer, Seth Twum Akwaboah, said the association’s intervention was prompted by concerns that the tax treatment affecting ABL could also impact other companies that rely on locally sourced raw materials.
Speaking on Joy News’ PM Express Business Edition on Thursday, Mr Akwaboah said the government’s tax policy was not deliberately designed to target ABL.
“Normally, when it comes to tax policies or general policies, you don’t develop policies to target a particular company. And I don’t think that was the intention of government, not at all,” he said.
He explained that the government may have introduced changes to various tax measures as part of efforts to increase revenue, but stressed that industry stakeholders must be able to highlight unintended consequences arising from such policies.
According to him, policymakers may have been seeking to balance the country’s finances by adjusting different revenue streams, but some measures could have unintended effects on specific sectors and businesses.
Mr Akwaboah said the dispute was particularly significant because of its potential impact on the sliding-scale tax regime, which provides a preferential tax arrangement for manufacturers that use locally sourced materials.
He said the policy had encouraged companies to develop local supply chains by sourcing raw materials from producers across different parts of the country.
“This is a sector which affects all those who are producing alcoholic beverages; they will be affected by this, especially those who are using local materials and have the opportunity to use what we call the sliding scale model,” he said.
The AGI CEO argued that the sliding-scale regime should be maintained and protected because of the benefits it has generated for local manufacturing and value chains.
“The intention of developing or introducing the sliding scale has been good, and we need to keep it, and we need to protect it because it has had a positive effect,” he said.
He explained that the tax incentive had encouraged companies to expand their use of locally produced inputs, creating supply chains that extend across the country.
“The positive effect is that indeed the companies, trying to take advantage of the tax reductions, have developed the value chains, which are now cutting across the country, and are picking raw materials everywhere,” he added.
The AGI has received a petition concerning the matter and has already commenced discussions with government officials.
Mr Akwaboah said the engagement with the Finance Ministry began during an AGI Corporate Forum on Thursday, where technical officials from the ministry were invited to hear industry concerns.
“We had a program today, and we invited the ministry. The ministry sent some technical officials to be with us, and presentations were made. So they understood the point,” he said.
He indicated that further discussions would be held with the ministry in the coming days and weeks in an effort to reach a resolution.
“We need to further engage to see what can be done within this couple of days or weeks to resolve it,” he said.
The AGI’s intervention follows concerns raised by ABL over the tax treatment it faces and the resulting pressure on its operations.
The association’s involvement has consequently broadened the issue from an individual dispute involving ABL to a wider industry policy concern, particularly for alcoholic beverage manufacturers that depend on locally sourced raw materials.
Mr Akwaboah said the AGI would continue engaging the Finance Ministry to find a workable solution.
“It is quite recent. We’ve had a petition. We are looking at it and very soon attend to it,” he said.
