Cement manufacturers decry high taxes, levies

The consistent introduction of taxes and levies is collapsing the cement industry, the Chamber of Cement Manufacturers (COCMAG), has indicated.
The chamber has ,therefore, called on the government to intervene to save the industry from further collapse.
The consistent introduction of various taxes and levies over the past two years dominated discussions at a board meeting of the chamber on June 27.

The Executive Secretary of the chamber, Rev. Dr George Dawson-Ahmoah, speaking at the meeting cited the recent fumigation levy of $0.50 per tonne on imported clinker by the Ministry of Health as one of such levies.

He described the situation as shocking, stressing that “how on earth can a raw material such as clinker be fumigated before clearance from the port? We are calling for the immediate abolishing of this levy”.

“Our members are not happy at all because besides this levy, there is still the VAT restructuring levy of five per cent and the two per cent special tax which has been in existence for the past three years.

“There are several others including a proposed increase in certification licence /surveillance from the Ghana Standards Authority. All these affect production cost in the production of cement culminating in uncompetitiveness,” he stated.

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Benchmark value

On the recent reduction of benchmark value, he said the Customs Division of the Ghana Revenue Authority (GRA) restricted the directive to cover the importation of raw material from only China and Turkey.

“There has been persistent appeals to the Custom Division of the GRA that cement raw materials are imported from all over the world, but these appeals have not been addressed. Meanwhile, the reduction in benchmark values are strictly adhered to on finished imported cement products (Bagged and Bulk) which are competing with the local cement manufacturers which is a clear case of unfair trade practices,” he noted.

Increasing number of cement factories
Another issue raised by members, he disclosed, was the increasing number of cement factories in the country.

“Already, the existing manufacturers have a combined utilisation rate of about 45 per cent, an indication that there is a total adequate cement capacity in Ghana.

Presently, there are nine individual cement manufacturing factories plus one bagging plant that has a total installed capacity of about 11.6 million tonnes per annum.

The average consumption is about 6.3 million tons per annum, bringing a surplus of about 5.3 million per annum. “So why do we need more cement factories? Dr Dawson-Ahmoah asked.

Increase in utility tariffs
On the Public Utilities and Regulatory Commission (PURC) proposed increase of electricity tariff, Rev. Dr Dawson-Ahmoah said, “This is a bombshell, the stated increase of 11 per cent as announced is rather about 46 per cent comparing with the previous tariff,’’ he bemoaned.

He ,therefore, cautioned that such development, if not addressed might, force companies to downsize as such government should step in to protect and empower the existing producers to promote the industry.

He was,however, full of gratitude to the Minister of Trade and Industry for his support and trusts that these issues would be addressed with his interventions.

The current members of the Chamber of Cement manufacturers are CIMAF Ghana Limited, Diamond Cement Group, CBI Ghana Limited and Ghacem Limited.

Wan Heng Ghana Limited and Xin Ann Safe Cement Limited, all Chinese companies, are yet to regularise their membership.


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