TIG Post

Tag: Excise tax

  • Reinforce environmental Excise tax at a rate of 1% – Packaged water producers to gov’t

    Reinforce environmental Excise tax at a rate of 1% – Packaged water producers to gov’t

    The National Association of Sachet and Packaged Water Producers (NASPAWAP) has entreated the government to reduce the environmental excise tax rate to 1% at entry points, applicable to all imported plastic granules, and impose 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 make it applicable to all imported plastic granules without any exceptions. However, semi-finished plastics imported into the country should be taxed at 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 has joined forces with plastic manufacturers in calling for the government to indefinitely suspend the newly imposed 5% excise tax on finished plastics. This appeal, according to a statement from the association, stems from the anticipated hardships that the 5% tax would impose on consumers.

    NASPAWAP highlighted the significant price hikes in bottled and sachet water since January 2024, attributing them to the cedi’s depreciation against the US dollar. The association argues that the 5% excise tax, although likely 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 is 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,” part of the statement read.

    This proposal aims to strike a balance between generating revenue for environmental management and alleviating the financial burden on consumers.

    “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.

  • Ghana Plastic Manufacturers fight 5% excise tax on locally produced plastic products

    Ghana Plastic Manufacturers fight 5% excise tax on locally produced plastic products

    President of the Ghana Plastic Manufacturers Association, Ebbo Botchway, has strongly criticized the imposition of a 5% excise tax on locally produced plastic products, warning of its adverse impact on businesses and consumers alike.

    Speaking on Joy FM’s Newsnight on June 26, Mr Botchway expressed concerns that the tax was implemented without consulting his association, emphasizing its potential to exacerbate living conditions.

    Mr Botchway argued against the blanket application of the tax to all plastic products, asserting that certain plastics, particularly rigid ones, do not pose significant environmental risks and should therefore be exempted.

    He emphasized the need for a nuanced approach, advocating for a collaborative effort to develop a product-specific tax list that considers environmental impact.

    “If this tax is not suspended,” Botchway cautioned, “it will not only harm businesses but also worsen the economic circumstances of consumers.”

    He criticized the government’s decision to allocate the revenue purely for government purposes rather than earmarking it for plastic waste management, a move he described as problematic for the industry.

    Moreover, Mr Botchway highlighted existing issues with the 10% tax under the Customs and Excise (Amendment) Act of 2013, which was intended to fund plastic waste management and recycling initiatives.

    Despite collecting over 1.97 billion Ghana cedis, Botchway lamented that none of these funds have been allocated to support recycling efforts, suggesting that a fraction of this sum could significantly boost recycling initiatives and plants dedicated to processing plastic waste.

    In the 2024 budget, the government expanded the Environmental Excise Duty to include plastic packaging, aiming to address distortions in the current excise policy.

    However, Botchway’s association contends that without proper consultation and consideration of the diverse impacts of various plastic products, such policies risk undermining both environmental goals and the economic stability of local plastic manufacturers.