Emission tax insensitive, anti-business – FABAG

The Emission levy was passed by Ghana's Parliament last year and will take effect from today February 1, 2024.

The Food and Beverage Association of Ghana (FABAG) has described the Emissions Levy Act, 2023 (Act 1112) as insensitive and anti-business.

The tax is based on the carbon dioxide equivalent emissions of automobiles with internal combustion engines. FABAG has since joined calls for the government to abolish the new tax handle.

In a press release, the Food and Beverage Association of Ghana President, John Awuni, characterised the tax as an anti-business, premature, and ineffective measure that will worsen the plight of businesses and common Ghanaians.

John Awuni, Preseident of FABAG

“Aside from taxing motor bikes and vehicles of various categories, the tax also seeks to measure carbon of industries and charge them appropriately. We find this tax especially the aspect that affects industry in the country as highly insensitive and totally anti-business,” the statement said.

“Considering the struggles of Ghanaian industries and businesses post Covid 19 vis-a-vis the massive new taxes introduced by the government since its assumption of power, the government should never have thought of adding another layer of tax to industry at this point in time,” it added.

Despite the tax’s appealing theoretical aspects, FABAG emphasised that Ghana introduced it too soon and failed to meet its goals.

“For instance, how are carbons emitted by industries through their manufacturing processes going to be measured? Who measures it? And how will the measurement be reported to ensure that there is no corruption in the collection of the data and right fees is paid to the government?

“How can carbon emitted by an industry be measured accurately to ensure that neither the government nor the industrial player is cheated?” the statement quizzed.

According to FABAG, the introduction of the levy will only serve to increase manufacturing costs, open the door for corruption, agitate the already volatile economic climate, and enrich a select few at the expense of the general public.

“As already indicated by the power providers in the country, the tax will cause them to increase electricity tariffs to industry and the ordinary Ghanaian who is already reeling under serious financial pressures will gravely suffer. when this happens, the corruption situation will even get worse as people will have to find innovative ways of surviving,” it stressed.

Read more on the emissions levy:

In the end, FABAG pleaded with the government to prevent the creation and imposition of any additional taxes in the best interests of the business community, the average citizen, and the nation as a whole.

FABAG, however, recommended that the government ensure significant expenditure reductions, waste reduction, and value-for-money projects to close the financial deficit that will be generated in its budget.