Plastic manufacturers reject 5% excise tax; demand consultations

The President of the Ghana Plastic Manufacturers Association, Ebbo Botwe, has called on the GRA to, as a matter of urgency, drop the 5% excise tax it has slapped on all locally manufactured plastic products.

He said that a press briefing held on May 28, 2024, informed stakeholders about the government’s plan to implement a new tax on locally manufactured plastic products, requesting a delay to allow for better consultation and review.

He, however, expressed disappointment that they have not received a response from the responsible body, the Finance Ministry, regarding the issue, despite sending reminders and follow-ups over eight weeks ago.

Mr. Botwe bemoaned the issuance of demand notices and threats from the Ghana Revenue Authority to its members over the 5% excise tax directive because, according to him, clarity has yet to be provided on the matter.

Addressing the press on Wednesday, June 26, 2024, Mr. Botwe asserted that his association was never consulted before, during, or after the passing of the tax.

“Let me say it again: GPMA, which is the umbrella organisation for the plastic industry, was never consulted when the government was putting this 5% excise tax regime together,” he said.

Mr. Botwe disclosed that GPMA members already pay a 10% environmental excise tax on selected materials at entry ports; hence, there’s no need for an additional 5% excise tax.

Describing the tax as obnoxious and retrogressive, he warned that its approval will result in heightened prices for everyday goods and services that rely heavily on plastic.

“The tax in its current state is obnoxious and retrogressive for manufacturing and harsh on the common man, as a wide range of industries whose products are consumed daily, including food and beverages, retail, water, medicine, and manufacturing, will be severely affected.”

“If this new tax is implemented in its current form, it will bring with it severe cascading, high-rise effects on the prices of products that affect our everyday lives because plastics and plastic packaging form about 98% of our daily basic needs,” he said, adding that over 92% of industries and businesses in Ghana depend on Ghana Plastic Manufacturers for all their plastic packaging needs.

He revealed that some manufacturing companies have successfully relocated to neighbouring countries and are thriving, even exporting their finished goods back to Ghana.

The association gave the government a one-week ultimatum to respond to their concerns, failing which they would implement critical measures including suspending operations, embarking on nationwide demonstrations, and laying off their many employees.

The Marketing Manager of the Foods and Beverages Association of Ghana, Mr. Kwabena Adu-Gyamfi, expressed their association’s support for the position of the plastic manufacturers.

He believes that the implementation of the 5% tax will adversely affect the businesses of their members and further worsen the economic situation of consumers.

Dr. Joseph Obeng, President of the Ghana Union Traders Association, advised that the tax be deferred because the time is not right and it is also not fair for the government to have imposed this tax on manufacturers who are already struggling to stay in business. 

Additionally, he argued that excessive taxes are increasing the cost of doing business in Ghana, making the country an uncompetitive investment destination in the sub-region.