Plastic manufacturers call for indefinite suspension of 5% tax

The Ghana Plastic Manufacturers' Association, has called on the government to indefinitely suspend the implementation of the five per cent excise tax on ex-factory pricing on all locally manufactured plastic products.It said the implementation of the tax policy would reduce the competitiveness of local industries and worsen the living conditions of consumers.The Association made the call at a press briefing in Accra on Tuesday.They said the levy should be suspended to allow for wider stakeholder consultation on any future excise tax on locally manufactured plastic products.Mr Ebbo Botwe, President of the Association, said the move would help to reduce the number of companies leaving to neighbouring countries, and incentivise local businesses to enhance production and support economic growth.In the 2024 budget, the government announced the expansion of the Environmental Excise Duty to cover plastic packaging, indicating that it had observed some distortions in the application of the excise policy.T he erstwhile Customs and Excise (Amendment) Act of 2013 (Act 863) levied a 10 per cent tax on the importation of plastic products into the country and established the Plastic Waste Recycling Fund to collect the revenue.The revenue was intended to be used to recycle plastic waste and produce garbage bins and bags to address the country's plastic pollution problem.While the 2024 budget stated that GHS2,416,217 was spent between the first and fourth quarters of 2023, there is no provision for allocated funds from 2024 to 2027.Mr Botwe stated that while the association supported efforts to decrease plastic waste pollution in the country, imposing taxes on local manufacturing companies would not solve the problem.'Considering all the foregone challenges, two plastic manufacturers were running simulation projects in Togo to consider a potential relocation of their production facilities and export finished goods to Ghana under the ECOWAS protocols. That means job creation in Togo and job losses in our mother land, Ghana,' he said.The association urged the government to lower various taxes to encourage compliance, which would increase tax revenue.It should also take steps to stop the over GHS22.5 million lost monthly due to illegal activities in the sector.Dr Joseph Obeng, President of the Ghana Union of Traders' Association (GUTA), supported the call for an indefinite suspension of the five per cent tax on local plastic manufacturing.'We cannot bear taxes any further, so we call for its suspension indefinitely, and call for a focus on stabilising the economy for businesses to have respite and grow,' he said.Dr. Obeng emphasized that if the government continued to tax firms and consumers, the country's goal of industrialization and import substitution will be thwarted.'Excessive taxation yields nothing for us, except non-compliance,' Dr Obeng added, advocating for support systems to help local businesses compete.Source: Ghana News Agency