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Weighing Down Cocoa Cooperatives: Tax Burden Takes a Toll on Production

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Weighing Down Cocoa Cooperatives: Tax Burden Takes a Toll on Production

The chairman of the Ghana Cooperative Council, Dr Bernad Bingab, has stated that the country’s inability to exempt cocoa cooperatives from tax may be contributing to declining annual output.

Ghana has, for two consecutive crop seasons, failed to meet its average annual cocoa production target of 800,000 metric tonnes, thereby adversely impacting local grinding and export.

Cocoa cooperatives have over the years contributed immensely to cocoa production through farmer training and the facilitation of access to inputs.

Additionally, they equip farmers with the productivity and management skills that improve their livelihoods and help generate additional income from cocoa premiums and other sustainable sources.

According to Dr Bingab, these interventions by the cooperatives are nearing suspension due to the tax burden on the cooperative, affecting the mandate of ensuring that cocoa communities, especially peasant farmers, are well catered for in line with improving productivity.

“Taxing the cooperative means you are depolarizing the cocoa sector, which affects those who are engaged in it,” he insisted.

He indicated that “the contributions made by the operatives are shared among members for growth. Immediately you begin to tax it, you reduce what is being circulated in the system, which becomes problematic.”

“In countries like Gambia, Kenya, Uganda, and Canada, cooperatives are not taxed. It is left for the government [of Ghana] to exempt cooperatives from any form of taxation,” said Dr Bingab.

He lamented the outdated nature of Ghana’s Co-Operative Act 1968, which regulates the activities of the organisation and has outlived its usefulness, urging the government to review the law to suit the current challenges affecting members.

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Dr Bingab made these assertions when speaking at the National Dialogue on Cooperative Development in Accra, organised by SOCODEVI, an international cooperation NGO that contributes to improving living conditions.

Cooperative Membership Declines

The chairman of the Cocoa Abrabopa Association, Ishmael Pomasi, also lamented the declining rate of membership of the body mandated to improve their livelihood.

According to him, the organisation, since its inception in 2006, has had a membership strength of 20,000 but currently only boasts 8,000 members.

He attributed the decline in membership to different government policies that affected the association, hence contributing to the decline in membership.

“We support farmers by subsidising essential farm inputs, including fertilisers. But it got to a time when the government was supplying free farm inputs to farmers, including fertilisers. At one moment, they will supply free fertiliser; the next government comes and then stops supporting farmers with free inputs,” he observed.

He emphasised that these inconsistencies in policy implementation affected their organisational programmes, hence reducing membership.

A deputy general manager at the Credit Union Association of Ghana, Solomon Nyarko, called on the government to create an enabling environment for the cooperative sector to thrive.

“The cooperative community provides a lot of opportunities, such as jobs and economic growth. It is incumbent on the government to create an enabling environment through formulating the right policies that seek their welfare,” he added.

Women Empowerment

The Principal Coordinator of SOCODEVI, Martha Rainer Opoku Mensah, said the organisation’s women in cocoa community initiative, TogetHer Project, has trained some 300 women and 100 young girls in leadership and financial illiteracy in the Ashanti and Western regions.

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“The TogetHer Project, which is a five-year initiative, aims to empower women and young girls between the ages of 18 and 35 in cocoa rural communities,” explained Mensah.”

She mentioned collective savings, entrepreneurship, and financial inclusion as focus areas to contribute to the sustainable resilience of the cocoa sector.

 

Source: Myjoyonline

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