Bottled water producers demand that the government suspend the 5% excise tax

The National Association of Sachet and Packaged Water Producers (NASPAWAP) has joined plastic manufacturers in calling for the government to indefinitely suspend the newly introduced 5% excise tax on finished plastics.

This call has become necessary, the association said in a statement, because the 5 percent tax would be hard for consumers.

The association highlighted the significant price increases in bottled and sachet water since January 2024 and attributed them to the devaluation of the cedi against the US dollar.

They argue that the 5% excise tax, presumably intended to combat the environmental problems caused by plastics, would only exacerbate the financial burden on consumers.

“We believe that the motive for the 5% additional excise duty is to raise money to combat the threat that plastic poses to the environment. There is already a 10% environmental excise duty on select plastic at the ports of entry. We were involved in the decision to tax plastic pellets at the ports of entry. This method expands the tax base as all plastic pellets are imported. However, only a few were covered at the implementation stage,” the statement said.

The association proposed an alternative approach: the environmental excise tax should be reduced to 1% at import points, applicable to all imported plastic granules, and a 10% tax should be levied on the CIF value of semi-finished plastic products imported into the country.

They believe that this method would generate more funds for plastics management than the controversial 5 percent tax on finished products.

“Our proposal to the government is to increase the environmental excise tax at import points by reducing the tax rate to 1% and applying it to all imported plastic granules without exception.

“However, semi-finished plastic products imported into the country are taxed at 10% of the CIF value. We are confident that this will generate more resources for plastics management than the additional 5% excise duty on finished plastics.

“We would also like to note that since the introduction of plastics in this country, all plastics management activities have been carried out exclusively by the private sector. From the collection point to the recycling stations, there have been no government subsidies to the collectors, etc.

“NASPAWAP therefore calls on the government to heed the call for an indefinite suspension of the additional 5% excise duty on finished plastics and to work with stakeholders,” the association added.