The Ghana Plastic Manufacturers (GPMA) has warned the Ghana Revenue Authority (GRA) to stop harassing its members to file for the 5% Excise Tax which, they are still waiting for the government’s response to their request.
“It is very frustrating and disturbing that, as we patiently wait for the appropriate response from the government, the Ghana Revenue Authority (GRA) has started issuing demand notices and threats to plastic manufacturers asking us to start filing for the 5% Excise Tax with effect from 21st June or face up with an assessment to pay with punitive penalties and possible “lock-up” of our investments if we do not comply. GRA should stop coming after us until there is clarity on this ambiguous tax”.
GPMA is therefore, giving the Government (MoF), one 1-week to respond to their request or shall have no other option than for All Plastic Manufacturers to SHUTDOWN production for at least ‘ONE WERK’ which eventually would affect over 30,000 workers.
The Association further appealed to the Vice President, Dr. Mahamudu Bawumia to intervene in the matter because the effect of the tax would affect the masses.
This was disclosed at a press conference by the President of Ghana Plastic Manufacturers (GPMA), Mr. Ebbo Botwe on the issue of the new 5% Excise Tax on all locally manufactured plastic products in the country.
GPMA he stated as the umbrella organization for the plastic industry, was never consulted when the government was putting the 5% Excise Tax regime together.
The 5% Excise tax in its current form according to him, is obnoxious and retrogressive for manufacturing and, it is going to be harsh on the common man in a wide range of industries whose products are consumed daily, including food and beverage, retail, water, medicines, and manufacturing would be severely affected.
“Let me remind you that, over 92% of industries and businesses in Ghana depend on Ghana Plastic Manufacturers for all their plastic packaging needs and this will inevitably cause a widespread increased cost in production, which will lead to higher prices for the consumer. Our everyday products have some sort of plastic packaging ie. household wares, agriculture, building & construction, pharmaceuticals, herbal medicines, food & beverage, agrochemicals, farm produce packaging, cement, oils, lubricants, water storage & transmission, confectionery, biscuits, Rice, Maize, banks, kooko, wake and many more”.
Mr. Botwe revealed that some plastic companies because of the 5% tax, have relocated to Ivory Coast and are doing well and exporting their finished goods back to Ghana. “The CFA is stable and the foreign exchange rates are good”.
Ghana he mentioned, is surrounded by countries with lower tax regimes saying, it is a fact that the borders are porous, allowing smuggling of goods into the country, be it imported from China or manufactured in the neighboring countries i.e. Togo and Ivory Coast.
The plastic industry is said to have given direct employment to over 39,260 people (axillary workers inclusive), generating over 1.89 million jobs in plastic waste recycling and 1.43 million jobs in the Sachet & Bottled water industry. Cumulative, the Plastic Industry employs about 3.71 mn. That’s about 11% of Ghana’s population.
The Industry generates more than Ghc 10.53 bn annually in payment of Import Duties alone on plastic raw materials to the Government.
The Plastic Industry pays over Ghc 146.2 million every month in electricity bills.
The Industry pays between 38% – 40% of the cost of raw materials in duties on plastic raw materials at the ports.
Therefore, the Government is said to be losing about Ghc 265 million annually through the illegal sale of plastic raw materials by Free Zones Companies and the government is silent about it.
Rev. George Ohene Adjei, President of Plastic Sellers Association lamented that, as a result of the tax, some members have decided to move out of the country as others have done and pledged their support to the move taken by GPMA.
The President of Ghana Traders Union Association (GUTA), Dr. Joseph Obeng described the action taken by the Government as insensitive to the business community saying, that if nothing is done to it, a lot of plastic businesses would leave the country.
The Marketing Manager for the Food and Beverages Association, Mr. Kwabena Adu-Gyamfi on his part urged the government to re-engage with GPMA on the 5% Excise Tax.
The President of the National Association of Sachet & Packaged Water Producers, Mr. Magnus Nunoo expressed worry about the harassment mated to members by the GRA as they await for government’s response to the obnoxious 5% tax.
