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

The National Association of Sachet and Packaged Water Producers (NASPAWAP) has joined forces with plastic manufacturers to urge the government to indefinitely suspend the newly introduced five percent excise tax on finished plastic products.

The association stressed in a statement that this appeal was due to concerns about the economic hardship that the 5 percent tax would bring to consumers.

NASPAWAP stressed that bottled and sachet water prices have increased significantly since January 2024, mainly due to the devaluation of the cedi against the US dollar.

They argued that the five percent excise tax, presumably intended to combat the environmental problems caused by plastics, would further increase 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 plastics pose to the environment. There is already a 10% environmental excise duty on select plastics 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: “Our proposal to the government is to increase the environmental excise tax at the points of entry 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 subsidies from the government 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.

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