Suspend 5% excise tax – Packaged water producers to govt

The National Association of Sachet and Packaged Water Producers (NASPAWAP) has called on the government to indefinitely suspend the newly imposed 5% excise tax on finished plastics.

According to a statement by the association, this call has been necessitated by the hardship the 5% tax would bring consumers.

The association highlighted the significant price increases in bottled and sachet water since January 2024, attributing them to the depreciation of the cedi against the US dollar.

They argue that the 5% excise tax, presumably intended to address environmental issues caused by plastics, would only worsen the financial strain on consumers.

“We believe the motive for the 5% extra excise tax would be to rake in funds to tackle the menace plastics are posing to the environment. There is an existing 10% environmental excise tax on selected plastic at the ports of entry. We were part of the decision to tax plastic granules at the entry ports. This method broadens the tax base since all plastic granules are imported. However, at the implementation stage, only a selected few were captured,” parts of the statement read.

The association proposed an alternative approach: reducing the environmental excise tax rate to 1% at entry points, applicable to all imported plastic granules, and imposing a 10% tax on the CIF value of semi-finished plastics imported into the country.

They believe this method would generate more funds for plastic management than the contentious 5% tax on finished products.

“Our suggestion to the government is to reinforce the environmental Excise tax at the entry points by reducing the tax rate to 1% and making it applicable to all imported plastic granules without any exceptions.

“However, Semi-finished plastics imported into the country be taxed 10 % of the CIF value. We believe this will rake in more funds for plastic management than the additional 5% Excise tax imposition on finished plastics.

“We also wish to put on record that since the inception of plastics in this country, all interventions in respect of managing plastic have been solely borne by the private sector. From the collection point to the recycling stations, there has not been any subsidy from the government to the collectors etc.

“NASPAWAP is therefore calling on the government to heed the call to suspend indefinitely the additional 5% Excise on finished plastics, and engage with stakeholders,” the association added.

It will be recalled that in June 2024, Ghana Plastic Manufactures’ Association persistently called on the government to suspend the newly imposed 5% excise tax on finished plastics.

The association threatened to embark on a one-day shutdown, which could potentially affect over 30,000 workforce if the government fails to suspend the new tax.

Source:theghanareport.com