AGI calls for extension of zero VAT for Ghanaian textile makers

14 Oct '21

1 min read

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The Association of Ghana Industries (AGI) has urged the government to extend the zero value-added tax (VAT) regime for textile manufacturers beyond the December 2021 deadline. The zero-rate was passed for three years as part of measures to revive the once-prosperous domestic textile industry after it suffered from the influx of pirated and cheap products.

AGI has started discussions with the ministry of finance and other stakeholders for a possible two-year extension of the zero VAT rate.

The introduction of the policy, which will result in an estimated loss of GH¢120 million in revenue loss for the government over the three-year period, has so far contributed greatly to stabilizing the industry.

AGI feels an extension will offer more time for the industry to fully recover and to be competitive within the African Continental Free Trade Area (AfCFTA) market, according to a report in Ghanaian daily.

AGI feels textiles should be a key part of the country’s agenda for the continental free trade area and that a VAT exemption will inure to the benefit of the economy in the long run.

Without this, the association fears, the sector might collapse and the modest gains made may be eroded.

Fibre2Fashion News Desk (DS)

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