AGI Optimistic About VAT Reforms Under Future Government

The Association of Ghana Industries (AGI) is hopeful for significant changes to the country’s Value Added Tax (VAT) system under the next government, following discussions with political parties as they prepare their manifestos.

Seth Twum-Akwaboah, AGI’s Chief Executive Officer, stated that the Association regularly engages with political parties before elections to advocate for policies that enhance the industrial sector.

These discussions often lead to Memorandums of Understanding (MoUs) that outline strategies to support industry growth.

This year, AGI has taken an additional step by engaging directly with the manifesto committees of the political parties to ensure their proposals are included. “We’re pleased to see that several parties have integrated our suggestions into their manifestos, and we look forward to collaborating with whoever forms the next government,” he noted.

Twum-Akwaboah highlighted that VAT reform is critical for improving the competitiveness of local industries. Currently, businesses face challenges in recovering VAT paid to the government. “We can only reclaim 15 percent of the 21.9 percent VAT we pay,” he explained, adding that the remaining amount effectively acts as a levy on businesses, undermining the VAT system’s intended purpose. He reiterated the need for a structural change in the system.

He made these comments following the Accra Regional AGI’s Annual General Meeting (AGM), where he shared that political parties have positively responded to AGI’s proposals, reflecting commitments to address VAT challenges in their manifestos.

In addition to VAT, AGI also discussed initiatives aimed at promoting small and medium-sized enterprises (SMEs), improving access to funding for entrepreneurs, and enhancing the export capacity of local industries. “We’ve had extensive discussions on how to support SME development and boost exports,” said Twum-Akwaboah. “It’s essential for every government to prioritize export development, and AGI is committed to playing a central role in achieving this goal.”

The AGM, held under the theme ‘Empowering Growth: Building a Strong Workforce for Tomorrow,’ featured remarks from Gabriel Osei Junior, Head of Business Development at the National Service Authority (NSA), who spoke on the importance of workforce development for Ghana’s economic future.

“Investing in lifelong learning and workforce development is crucial for sustaining economic growth and competitiveness,” Mr. Osei Junior stated. “Collaboration among government, industry, and educational institutions is vital to equip workers with the necessary skills for a rapidly changing economy.”

He emphasized that education and job training are foundational to building a skilled workforce capable of driving economic progress. “A strong, competitive economy relies on well-trained workers who can adapt to new technologies and changing work patterns,” he added. “We need a comprehensive approach that effectively addresses the evolving skill requirements of the entire workforce.”

Osei Junior also underscored the importance of innovation, driven by research and development, in enhancing productivity and improving living standards. “The private sector plays a crucial role by investing in solutions to industry challenges and employing skilled workers to tackle these issues,” he said.

He called for a partnership between the public and private sectors to fund research and provide educational access, emphasizing that this collaboration is essential for preparing the workforce for future economic demands. “Education enhances workers’ ability to adopt new technologies, lead healthier lives, and adapt to changing economic realities,” he noted. “Ultimately, aligning business, education, and government efforts will foster innovation and sustainable growth.”