The Association of Ghana Industries (AGI) says the rapid depreciation of the Cedi over the first quarter of 2012 has led to a high level of taxation through continuous increases in import duties charged mainly in foreign currencies.In its first quarter Business Barometer, the Association said the level of taxation had gone up as a result of rapid depreciation of the cedi since duties on imported raw materials were calculated in foreign currencies such as the Dollar.“This is a major concern to industry as increase in taxes raise cost of production of local producers,” Nana Owusu-Afari, President of AGI told journalists at a press conference to release the results in Accra.For the first time over the last eight quarters, high level of taxation emerged as the topmost challenge facing business operators in the country. High utility prices was ranked second and depreciation of the Cedi ranked third.Access to credit, which in the past two years had been among the three topmost challenges, ranked fourth while poor power supply which was not a challenge in the last quarter of 2011 jumped to fifth.Mr Seth Twum-Akwaboah, Executive-Director, AGI said concerns of the business community about the poor power supply attested to frequent power outages and poor quality of power supply, which had led to increase in the cost of production.He called for creative and innovative measures to halt the fast depreciation of the Cedi, which was the main reason behind the deterioration in supply of raw materials and other challenges.Despite the challenges, more than 62 per cent of Chief Executives interviewed were optimistic that their businesses would perform better in the second quarter.They attributed the confidence to an expected increase in market share, availability of raw materials and improved staff efficiency.On the other hand, about 11 per cent of the respondents anticipated poor performance in the second quarter of 2012, citing low purchasing power of consumers, high cost of raw materials and the depreciation of the Cedi as main reasons for pessimism.On the three topmost challenges in each sector, businesses in agriculture said access to credit, high level of taxation and high cost of raw materials while the manufacturing sector cited competition from imported goods, depreciation of the Cedi and high utility prices.The construction sector saw access to credit, lack of contracts and unfair award of contract as the three most important challenges and the service sector mentioned high level of taxation, high utility prices and depreciation of the Cedi as challenges.The AGI Business Barometer Index, which measures the level of confidence in the business environment, recorded a positive indicator of 24 in the first quarter of 2012, a sharp drop in business expectations over 30 recorded in the last quarter of 2011.Over 250 businesses across the large, small, medium and micro levels took part in the survey.