Companies operating under Ghana’s Free Zones scheme are urging the government to revise the policy so firms that have completed their ten-year tax holiday can sell a greater share of their products on the domestic market at competitive prices.
The companies say restrictions on local sales are weakening their ability to compete, even after they begin paying corporate tax and, in some cases, import duties on raw materials and spare parts.
The issue was raised during a working visit by Western Regional Minister Joseph Nelson to Samartex Timber and Plywood Company Limited at Samreboi in the Western Region.
Samartex Managing Director Dr. Richard Duah Nsenkyire said businesses that had completed the tax holiday should be able to supply local industries, particularly the construction sector, without unnecessary regulatory barriers.
He said consumers looking for timber and plywood made in Ghana often found the products difficult to obtain at affordable prices, leaving some to rely on the black market.
“When we want to industrialise and resource our local industries, we have to make sure that when you have gone through the ten-year tax holiday and start paying corporate tax, you should be allowed to serve the local industry,” he said.
Dr. Nsenkyire said Samartex had the capacity to meet domestic demand, but procedures and additional costs under the existing system made its products less competitive.
He added that institutions and private schools attempting to buy locally manufactured wood products also faced bureaucratic difficulties involving the Free Zones Board and Customs.
According to Dr. Nsenkyire, the restrictions and costs had reduced the incentive for companies to remain within the scheme after their tax holidays ended. This was particularly the case for firms still paying extra expenses on imported inputs.
Mr Nelson accepted that the companies’ concerns needed attention. He described the Free Zones policy as a valuable initiative created to attract investment, encourage export-focused manufacturing and generate foreign exchange.
However, he said the framework should be reviewed for businesses that had completed their tax holidays and were now paying taxes without receiving the benefits that had originally drawn them to the scheme.
“The original idea of Free Zones is good, is still good, but then we still have to look at it, especially for those of you who have gone through the ten-year tax holiday and you are paying taxes and everything. But I don’t really see any advantage,” Mr Nelson said.
The companies believe a policy review would strengthen their competitiveness, safeguard jobs and make Ghanaian-made products more affordable and accessible to consumers.
For Samartex, allowing established manufacturers to supply the domestic market would also support Ghana’s industrialisation efforts while enabling them to continue their export operations.
The proposal forms part of wider discussions on how the Free Zones framework can retain its export focus while giving greater support to local industry and improving access to products made in Ghana.
By Ebenezer Atiemo
