The Food and Beverages Association of Ghana (FABAG) has launched a controversial campaign demanding that the government scrap the 20% Excise Tax on food juices and beverages.
The association says the tax is taking a major toll on the sector causing a significant decline in sales. Chairman of FABAG, John Awuni claims the tax has caused more than 50% decline in sales since its introduction in 2023.
Due to the decline in sales many manufacturing companies are closing their plants leading to a decline in production from about 85% to around 38%.
John Awuni further reveals that many jobs have been lost while significant revenues continue to go down the drain.
Ahead of the 2025 Budget presentation, the association says the government must consider scrapping the tax to relieve the industry. The chairman says such austere taxes must be suspended to revive the declining industry.
In an interaction with the media, John Awuni explained that, “in the manufacturing sector, for instance, in the food and beverage sector, where I speak for, I would say that the government must consider strongly and remove the 20% exercise that was imposed on food juices and beverages in the country. Because clearly that act has hit a major blow on the sector.”
He therefore told the government to “come up with a major fiscal policy in terms of removal of that particular tax.”
FABAG further maintains that scrapping the 20% Excise Tax will further complement the government’s 24-hour agenda. Failure, he says will undermine the flagship 24-hour economy initiative which is aimed at boosting production.
This call by the Beverages Association is strongly supported by the Association of Ghana Industries (AGI). The AGI also justifies that the tax has resulted in mass layoffs in the sector and further given imported soft drinks an advantage to dominate the market.
The 20% Excise Tax was imposed on sweetened and fruit juice producers in 2023 under the Amendment Act of 2023 (Act 1093). Both AGI and FABAG maintain the tax has become a bane in the sector hence the need for the government to consider scrapping it in the next budget presentation to parliament. Meanwhile, the government is yet to respond to these demands.
