Plastic manufacturers call on govt to suspend tax on local products

The Ghana Plastic Manufactures' Association has asked the government to suspend the implementation of the five per cent excise tax on the ex-factory price of all locally manufactured plastic products and packaging with immediate effect.

The suspension is to broaden stakeholders’ consultation to arrive at "an agreed path" that will benefit all.

The association has given the government one week to respond, failure of which it will embark on a one-day shutdown which is likely to affect over 30,000 workforce. 

The President of the association, Ebbo Botwe, said at a press conference last Wednesday that although the association was yet to agree with the government on the way forward, the Ghana Revenue Authority (GRA) had started issuing demand notices and threats asking members to start filing for the five per cent tax with effect from June 21, this year, or be faced with an assessment to pay with punitive penalties and possible "lock-up."

"GRA should stop coming after us until there is clarity on this ambiguous tax," he told a press conference in the presence of other stakeholders in the plastic manufacturing chain.

Already the association is paying a 10 per cent environmental excise tax on selected plastic materials at the entry ports. "This tax in its current form is obnoxious and retrogressive for manufacturing.

This tax will be harsh on the common man as a wide range of industries whose products are consumed daily, including food and beverage, water, medicines, and manufacturing will be severely affected," he said.

The press conference was a follow-up to a similar one held on May 28, this year, to appeal to the government to reconsider its decision. According to the president, more than 92 per cent of industries and businesses in Ghana depended on plastics for all their needs and if the new tax regime was implemented, it would affect overhead costs which would finally be passed on to the final consumer.

Mr Botwe said some companies had already relocated to neighbouring countries for production and the final goods were exported to Ghana. "Let me remind the government that the plastic industry gives direct employment to over 39,260 people, generates over 1.89 million jobs in plastic waste recycling and 1.43 million jobs in the sachet and bottled water industry.

"Cumulatively, the plastic industry employs about 3.7 million which is about 11 per cent of Ghana's population," he said.

Frustration

In his contribution, the President of the Ghana Union of Traders' Association (GUTA), Dr Joseph Obeng, said the timing of the government was not right and unfair, considering the suffering of the people.

He said the exchange rate alone was killing businesses and with the current action of the government "it appears it just doesn't care." The GUTA president said the plastic industry was among the few businesses that were doing well but with such taxes, some will soon fold up.

He called on the government to listen and suspend the introduction of the new tax.