Two-year extension of VAT relief on African prints not enough-GFL

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VAT
VAT

The Ghana Federation of Labour (GFL) has stated that the extension of the VAT relief on African prints for textile manufacturers for additional two years is not enough and might not be fully beneficial to the industry.

Mr Abraham Koomson, GFL Secretary General in an interview with the Ghana News Agency in Tema on the 2022 Economic Policy and Budget presented to Parliament by Mr Ken Ofori-Atta, Minister of Finance said GFL disagreed with the Minister on the two year extension stressing that it was not a smart move.

According to Mr Koomson said nobody would invest in machinery for only two years, and suggested that a minimum of seven to 10 years would be appropriate for proper investment into their productions.

“Simply meaning, it cost a lot of money to invest in textiles machine, and not assured of sustained progressive policy becomes a problem,” he stressed.

The Finance Minister during the reading said in 2019, VAT relief was provided on African prints for textile manufacturers to enable them resuscitate their operations and provide affordable textiles to the market.

“This policy has succeeded in stabilizing the industry and formed the basis for the modest increase in production,” he noted and added that the relief enabled the companies to also maintain their prices over the period making the cost of local prints affordable.

The Minister said “Additionally, they have been able to keep their employees and made some investments in the industry as a result of the policy, government has decided to extend the relief for a further two years.”

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