The National Association of Sachet and Packaged Water Producers (NASPAWAP) has joined numerous associations and interest groups in urging the government to indefinitely suspend the imposition of a 5% excise tax on finished plastics.
The associations include the Ghana Plastic Manufacturers’ Association (GPMA), the Ghana Union of Traders Association (GUTA), the Food & Beverage Association of Ghana (FABAG) and the Plastic Sellers Association of Ghana (PSAG),
NASPAWAP warns that this tax could lead to significant hardships for consumers, especially considering the critical role of packaged water in daily life.
“Water is life, and in most countries, packaged water in whatever form is exempt from all forms of taxes,” stated Magnus Nunoo, President of NASPAWAP.”
According to a GSS report released in 2023, 72% of urban populations depend on sachet water.
The percentage in non-urban areas could be even higher due to the extensive pollution of our water bodies caused by galamsey operations.”
The association expressed concern that the 5% excise tax on finished plastics would inevitably increase the retail prices of sachet and bottled water.
This concern is amplified by the fact that prices of bottled and sachet water have already seen at least two upward adjustments since January 2024, primarily due to the rapid and sustained depreciation of the cedi against the US dollar.
“We believe the motive for the 5% extra excise tax is to generate funds to tackle the environmental challenges posed by plastics,” Nunoo explained.
“However, there is already a 10% environmental excise tax on selected plastics at the ports of entry. We were part of the decision to tax plastic granules at the entry ports, but at the implementation stage, only a selected few were captured.”
NASPAWAP proposed an alternative solution to the government: reinforcing 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 exceptions.
They also suggested that semi-finished plastics imported into the country be taxed at 10% of the CIF value.
“We believe this will generate more funds for plastic management than the additional 5% excise tax on finished plastics,” Nunoo said.
The association also stressed that since the inception of plastics in the country, all interventions for managing plastic waste have been solely borne by the private sector, with no government subsidies for collectors or recycling stations.
Meanwhile, the GPMA has indicated that the Associations held a fruitful discussion with the government (i.e. The Ministry of Trade & Industry) on Friday the 5th of July, 2024 on the implementation of the 5% Excise Tax on all locally manufactured plastic products.
Deputy Minister for Trade & Industry, Hon. Michael Okyere Baafi (MP), it said, showed good faith and assured that he would facilitate further engagements and dialogue with the government and also immediately trigger the necessary mechanisms and procedures to stop the implementation of the 5% Excise Tax.
According to the GPMA and its partners, they have, therefore, called off their intended demonstration that was scheduled for the 10th of July 2024 and have put on hold the intention to shut down production