Two private sector operators are threatening strike actions against government over increases in taxes affecting their sectors.
While the transport owners are protesting over a 500 per cent increase in insurance premiums, the Ghana Union of Traders Associations (GUTA), is demanding a review of the recent tax increase which have led to the collapse of their businesses.
Transport owners have declared a nationwide strike from Monday, to protest against the insurance premiums, describing them as outrageous, reports Bernard Benghan.
The operators whose membership includes the Ghana Private Road Transport Union (GPRTU), Ghana Committed Drivers Association (GCDA) and the Ghana Roads Transport Co-ordinating Council (GRTCC), said commercial drivers would not work if the decision was not reversed.
The Ghana Insurance Association (GIA) last June proposed an 800 per cent increase in motor insurance premiums, but following protest from the transport unions, it was reduced to 400 per cent.
The commercial drivers, however, alleged that the GIA was scheming to increase the third party insurance to 500 per cent.
Speaking at a news conference in Accra, yesterday, spokesman for the operators and the chairman of GCDA, Mr Charles Danso, said commercial drivers would not work if the decision was not reversed.
“We are giving National Insurance Commission (NIC), GIA and the Ministry of Transport two days within which to reduce the motor insurance premium rate to the agreed percentage of between 240-260 per cent,” he stated.
Mr Danso said commercial operators had not been informed about the directive, and it should be reversed until a consensus was reached, noting that the GIA and NIC were not “being fair to them” especially, when commercial drivers were not benefitting from the insurance and other transport-related charges.
”We are not ready to pay anything more than 250 per cent and we urged them to reverse the policy since commercial drivers feel they have been cheated by the status quo,” he added.
The road transport owners were also incensed that compensation package for paying a 500 per cent premium is GHC2,000. They said even at the agreed 240-260 per cent increase in premium, the compensation was pegged at GHC1,000.
For the drivers, GHC2,000 for 500 percentage increase in premiums was unacceptable.
Insurance premiums have become a contentious issue for the industry regulator, National Insurance Commission. The Commission said premiums were last increased more than five years ago. They explained the marked depreciation in the Ghana Cedi was hurting their ability to pay claims.
Therefore, in June 2015, the NIC announced that annual premium for the least motor insurance policy – third party insurance – was to shoot up from GH¢70 to GH¢471 for private cars. The same insurance for commercial taxis were priced at GH¢576 per annum.
Third party premium for mini-buses, commonly called ‘trotro’, has also been set at GHC586 while motorcycle owners are required to pay GH¢256 for an insurance.
But clients resisted the move and drivers threatened to form their own insurance company.
For its part, the Ghana Union of Traders’ Associations (GUTA) has given the government two weeks to review the tax increases, reports Castro Zangina-Tong
Failure to do that, the union said, would compel traders to close down their stores and shops, to press home their demand.
The president of GUTA , Mr. George K. Ofori, addressing a news conference in Accra yesterday, on the introduction of some new tax increment of existing ones, coupled with the numerous taxes and the levies being paid at the country’s port, said it had adversely affected businesses in the country, regarding import and trading.
He said that traders would not pay the 17.5 percent Value Added Tax (VAT) National Health Insurance Levy (NHIL), if their concerns were not addressed.
“The business community in Ghana, especially, those in the informal sector, have been calling on the government to look into the excessiveness of these tax regimes that are overburdening the already exhausted members of the trading community, but this has not been heeded to. We are, therefore, calling on the government to, as a matter of urgency, halt the collapse of businesses in the country resulting from abnormal taxation,” he stressed.
GUTA further expressed its disappointment in Parliament for failing to fight for the good of the ordinary Ghanaian but had rather sided with Cabinet to make life unbearable for the citizenry.
“To be frank, we cannot hide our total disappointment in our Honourable Members of Parliament (MPs) who are supposed to represent our interest in the legislature. They are always very quick at passing any bill that is brought before them by Cabinet without due consultation with stakeholders, especially those in the private sector, to enable them make an informed decision on government policy. Our MPs, therefore, cannot escape blame of helping the executive arm of government to worsen the plight of Ghanaians,” Mr. Ofori stated.
He directed traders throughout Ghana to put red bands in front of their stores and shops for a period of two weeks to indicate the seriousness of their impending action and the dying of their businesses.
Mr. Ofori said that the union was not against the government but rather against what he described as “obnoxious” taxes that had the tendency of collapsing their businesses.
He said that whilst Ghanaians paid a whopping 17.5 percent VAT/NHIL, Nigeria, a sister country paid only five percent VAT, adding that “What has become a source of worry to GUTA is the increase of witholding tax to 15 percent,”
“The question arising here is how practicable on this earth should a government so atrociously hold such a gargantuan amount of the people’s trading capital?” he asked.
On the implementation of the ECOWAS Common External Tariffs scheduled to commence on February 1, this year, GUTA appealed to the Ghana Revenue Authority, Customs Division, to suspend it in the meantime for proper consultation with traders and other relevant stakeholders to build consensus for a smooth take off.
“We would, however, caution that any attempt to impose it on us without proper consultation, will be met with stiff resistance as we are already over-saturated with numerous high taxes and levies that is making us intolerant to impositions,” Mr. Ofori emphasised.