Accra Brewery Limited (ABL) has appealed to the government to delay the implementation of newly approved excise duty increases on locally manufactured beer, saying further consultations are needed to determine their potential effects on industry, jobs and consumers.
The Country Director of ABL, Thatokuhle Hlongwa, made the call at the Association of Ghana Industries (AGI) 2nd Quarter Business Barometer presentation and Corporate Forum in Accra.
Under the approved tax changes, the excise duty on locally produced beer is expected to increase from 32.5 per cent to 40 per cent.
Beer products with a high proportion of locally sourced raw materials, including cassava-based beer, will face an even steeper increase, with the applicable rate rising from 10 per cent to 25 per cent.
The excise duty on imported beer, meanwhile, will remain at 47.5 per cent.
Mr Hlongwa said the proposed increases could have consequences extending beyond the immediate tax burden on breweries, with potential effects on production costs, retail prices, consumer demand, investment and employment.
He explained that changes in the tax regime could also affect businesses throughout the brewing value chain, including farmers, suppliers, distributors and other local enterprises.
“Changes to the excise taxation have implications that extend far beyond the taxes paid by the manufacturers,” he said.
According to him, ABL has made significant investments in local production capacity, domestic sourcing and the development of businesses linked to its operations.
He therefore urged policymakers to consider the wider economic contribution of the brewing industry when assessing the impact of the new tax measures.
Mr Hlongwa stressed that ABL’s position should not be interpreted as opposition to taxation or the government’s efforts to raise revenue for national development.
“Our opinion is not against taxation, nor is it opposed to government’s legitimate objective of mobilising revenue for national development,” he said.
Instead, he advocated a balanced approach that would allow government to mobilise revenue without undermining local manufacturing, employment, investment, agricultural production and consumer welfare.
ABL is consequently calling for the implementation of the new excise duty rates to be postponed to create room for further discussions between government and industry.
Mr Hlongwa said additional consultations would allow both sides to better assess the broader economic consequences of the tax increases and develop measures to minimise disruptions to businesses and employment.
“We are not against taxation. Absolutely not. But what we are doing is, let’s have a further dialogue, a further stakeholder engagement, give us the opportunity to dialogue further,” he said.
He identified three immediate steps for consideration: deeper dialogue with industry, broader stakeholder engagement and a postponement of the implementation of the new rates.
Concern over cassava-based beer
A major concern for ABL is the sharp increase in excise duty on beer produced with significant quantities of locally sourced raw materials.
The proposed rise from 10 per cent to 25 per cent on cassava-based beer, the company argues, could have repercussions for farmers and other businesses involved in the domestic agricultural supply chain.
Mr Hlongwa said tax policies affecting breweries should recognise the industry’s links with agriculture, local procurement, employment creation and domestic value addition.
He said a policy that supports local raw materials and manufacturing should be carefully assessed to ensure that its implementation does not unintentionally weaken those linkages.
ABL reaffirmed its willingness to engage government, the AGI and other stakeholders to find a workable approach to the excise duty reforms.
The company said it remained committed to supporting Ghana’s economic transformation while seeking policies that protect jobs and investment, promote local agricultural production and ensure sustainable government revenue mobilisation.
