ACCRA – Government has rejected calls by Accra Brewery Limited (ABL) to freeze or postpone the implementation of new excise duty rates on locally manufactured beer.
ABL had appealed to government to delay the new rates, warning that they could have far-reaching consequences for manufacturers, consumers, farmers, employment and investment.
Under the newly approved reforms, the excise duty on locally manufactured beer is expected to increase from 32.5% to 40%, while the rate on beer produced with high levels of local raw materials, including cassava-based beer, will rise from 10% to 25%. The rate on imported beer will remain at 47.5%.
ABL Country Director, Thatokuhle Hlongwa, made the appeal at the Association of Ghana Industries (AGI) Second Quarter Business Barometer and Corporate Forum in Accra, arguing that changes in excise taxation affect production costs, consumer prices, business volumes, investment decisions and employment.
The brewery estimated the potential impact on its budget at US$7.5 million and warned that up to 2,000 jobs across the beer value chain could be at risk, noting that the beer sector supported 52,000 jobs in 2023.
However, in a detailed rejoinder, government has dismissed the claims that the amendments could unintentionally undermine local production and discourage investment.
Government clarified that the sliding scale has not been abolished but has been retained in its three-band form, with a preferential margin of 22.5 percentage points below the standard rate remaining available to producers in the top band.
According to government, the review was prompted by evidence that the concession is being claimed at a scale and on a basis that the underlying local agricultural production does not support.
It also argued that the competitiveness argument advanced by ABL is arithmetically unsustainable once the statutory bases of assessment for imported and locally manufactured goods are correctly applied.
Government maintains that the revised regime is aimed at raising revenue while still preserving incentives for local production and strengthening linkages between agriculture and manufacturing.
_Story by Dr. Dr. Ageorgia_
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