Packaged water producers urge govt to suspend 5% excise tax

The National Association of Sachet and Packaged water producers (NASPAWAP) has joined calls by plastic manufacturers for the government to indefinitely suspend the newly imposed 5% excise tax on finished plastics

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

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

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

“We believe the motive for the 5% extra excise tax would be to raking 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.

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 make 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 has been solely borne by the private sector. From the collection point to the recycling stations there has not been any subsidy from government to the collectors etc.

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