Suspension of 5% excise duty on locally produced plastic products… GPMA calls on the government

The Ghana Plastics Manufacturers Association (GPMA) has called on the government to immediately suspend the newly imposed 5 per cent sales tax on all locally manufactured plastic products as members are currently grappling with high production costs.

According to them, about 92 percent of industries and businesses rely heavily on plastic packaging and products, which would inevitably result in a widespread increase in consumer prices.

At a press conference in Accra yesterday, Mr. Ebbo Botwe, president of the association, stressed that the tax would affect various items such as plastic chairs and tables, data pipes, water tanks, ice chests, cable pipes, electrical wires, fittings, canisters and other products.

In his opinion, this would make it difficult for the local manufacturing industry to compete effectively with imported goods.

“Indeed, for the current total plastic production that we produce in Ghana, these above-mentioned products and many other products that we call flexible plastics only constitute about 21 percent of our total production.

Rigid plastics account for approximately 79 percent of production. “This is a long-held view that when plastic is mentioned, it is only about shopping bags and sachets of clean water, which is wrong and needs to be corrected from now on,” he stressed.

Botwe said it was surprising that the Ghana Revenue Authority (GRA), which collects taxes on behalf of the government, did not inform the Association before its implementation, stressing that such behavior was not conducive to the business community.

He further said that given the challenges facing the association, two plastic producers are currently conducting simulation projects in Togo to consider potentially relocating their production to Togo and exporting the finished product to Ghana.

“As of December 31, 2023, the 10 percent environmental excise duty has accrued over GH¢1.976 billion since its introduction in 2011. All this money is supposed to go to the consolidated fund for the fight against waste, but we are doing everything in our power to ensure that not a single pesewa is paid to knowledge, so why this new tax that would burden our difficult situation,” Botwela lamented.

“Some manufacturing companies have already suspended production and furloughed workers wholesale due to high exchange rates, high benchmark values ​​and high opening overhead costs.

“Therefore, after deeper consultations with our partners such as the National Association of Sachet and Packaged Water Manufacturers, the Ghana Union of Traders Association, the Association of Ghana Industries and the Food and Beverage of Ghana, we have urged the government to suspend the 5 percent excise duty,” he said Botve.