Industry eyes VAT reform under next government

By Kizito CUDJOE and Sandra Agyeiwaa OTOO

The Association of Ghana Industries (AGI) is optimistic about changes to the country’s Value Added Tax (VAT) system under the next government, following discussions with political parties during the preparation of their manifestos.

AGI’s Chief Executive Officer, Seth Twum-Akwaboah, said the Association regularly engages with political parties ahead of elections to outline policies aimed at boosting the industrial sector. These engagements often culminate in Memorandums of Understanding (MoUs) that lay out strategies to support industry growth.

This year, he said, AGI took an extra step by engaging the parties’ manifesto committees to ensure that some of their proposals are reflected. “We’re pleased to see that several parties have incorporated our input into their manifestos, and we look forward to collaborating with whoever forms the next government,” he added.

Mr. Twum-Akwaboah noted that VAT reform is crucial for improving the competitiveness of local industries. Under the current system, he said, businesses struggle to recover all the VAT paid to government.

“We can only recover 15 percent out of the 21.9 percent VAT paid to government,” he explained. The rest, he lamented, becomes a levy on businesses – undermining the VAT system’s effectiveness. For this reason, AGI maintains that the structure needs to change.

Mr. Twum-Akwaboah was speaking in an interview on the back of the Accra Regional AGI’s Annual General Meeting (AGM), and added that political parties had responded positively to AGI’s proposals with manifestos reflecting commitments to address the VAT challenges.

Beyond VAT, AGI also discussed initiatives to promote small and medium-sized enterprises (SMEs), improve access to funding for entrepreneurs and boost the export capacity of local industries.

“At the SME level, we’ve had extensive discussions on how to support their development and enhance the export sector,” Mr. Twum-Akwaboah said. “It’s essential for every government to prioritise export development, and AGI is committed to playing a central role in achieving this goal.”

The AGM was held under the theme ‘Empowering Growth: Building a Strong Workforce for Tomorrow’.

Delivering remarks on behalf of the National Service Authority (NSA) Executive Director, Gabriel Osei Junior – Head-Business Development, NSA – highlighted the importance of workforce development for Ghana’s economic future.

“Investing in lifelong learning and workforce development is crucial for maintaining economic growth and competitiveness,” Mr. Osei Junior said. “Collaboration between government, industry and educational institutions is essential to equipping workers with the necessary skills for a rapidly evolving economy.”

He added that education and job training are fundamental to building a skilled workforce that can drive economic growth.

“A strong, competitive economy depends on well-trained workers who can adapt to new technologies and shifting work patterns,” Osei emphasised. “We must sustain an approach that covers the entire workforce, is incremental in its effectiveness and dynamic enough to meet evolving skill requirements.”

Mr. Osei Junior stressed that innovation – driven by research and development – is key to productivity growth and improving living standards.

“The private sector plays an essential role by investing in solutions to industry challenges and employing highly skilled workers to address these issues,” he said.

He called for collaboration between the public and private sectors to fund research and provide access to education, emphasising that this partnership is vital in preparing workers for demands of the future economy.

“Education improves workers’ ability to leverage new technologies, live healthier lives and adjust to changing economic realities,” he noted. “Ultimately, the alignment of business, education and government will foster innovation and sustainable growth.”

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