Sachet and packaged water producers demand suspension of 5% Excise tax

The National Association of Sachet and Packaged Water Producers (NASPAWAP) is calling on the government to suspend, indefinitely, the imposition of a 5% excise tax on finished plastics

In a news release, the association stated, “The hardship this may cause to the final consumer has necessitated this call.”

According to the group, water that has been packed is generally free from all types of taxes.

72% of urban populations rely on sachet water, according to the 2023 GSS study, which emphasises that “the percentage in the non-urban population could even be higher due to the extensive pollution of our water bodies due to galamsey operations.”

As a result, the statement added, “it is inconceivable that an excise tax of 5% is being imposed on finished plastic, which could inevitably affect the retail prices of Sachet and bottled water.”

NASPAWAP states that since the introduction of plastics into this nation, the private sector has been entirely responsible for all plastic management initiatives. It further states that “there has not been any subsidy from the government to the collectors, etc., from the collection point to the recycling stations.”

Below is the statement.

PRESS RELEASE FROM THE NATIONAL ASSOCIATION OF SACHET AND PACKAGED.

The National Association of Sachet and Packaged Water Producers (NASPAWAP) will like to add its voice to the numerous associations and interest groups, calling on the government to suspend indefinitely the imposition of a 5% excise tax on finished plastics. This call has been necessitated by the hardship it may bring to the final consumer. Water is life, and in most countries, packaged water in whatever form is exempt from all forms of tax.

According to a GSS report released in 2023, 72% of urban populations depend on sachet water. The percentage in the non-urban population could even be higher due to the extensive pollution of our water bodies due to galamsey operations.
It is therefore unthinkable that an excise tax of 5% is being imposed on finished plastic, which could inevitably affect the retail prices of soda and bottled water.

Since January 2024, prices of bottled and sachet water have seen at least two upward adjustments due to the rapid and sustained fall of the cedi against the US dollar.

We believe the motive for the 5% extra excise tax would be to rake in funds to tackle the menace plastics pose 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 select few were captured.

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 will be taxed at 10%. of their 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. Thank you.

Amicable solution

Meanwhile, the Ghana Plastic Manufacturers Association (GPMA) and its partners, the Ghana Union of Traders Association (GUTA), the NASPAWAP, the Food & Beverage Association of Ghana (FABAG), and the Plastic Sellers Association of Ghana (PSAG), held a meeting with the Ministry of Trade & Industry on Friday, July 5, 2024, on the issue of the implementation of a 5% excise tax on all locally manufactured plastic products.

The Deputy Minister for the Ministry of Trade and Industry, Michael Okyere Baafi (MP), who sat with the GPMA and its partners, gave an assurance 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.

To this end, GPMA and its partners, in a statement dated July 8, 2024, said they have called off their intended demonstration that was scheduled for July 10, 2024.

The association and its partners also said, “We have put on hold our intended plan to shut down productions,” appreciating the Deputy Minister for the Ministry of Trade and Industry for his intervention.