NASPAWAP Calls for Suspension of New 5% Excise Tax on Finished Plastics

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

NASPAWAP argues that this tax would further burden consumers who are already grappling with increased prices of bottled and sachet water since January 2024, largely due to the depreciation of the cedi against the US dollar.

In a press statement released on Monday, July 8, NASPAWAP emphasized the adverse impact of the tax on consumers, citing significant price hikes in their products.

They attribute these price increases to economic factors such as currency fluctuations rather than production costs alone.

According to the association, the imposition of a 5% excise tax aimed at addressing environmental concerns related to plastic use would exacerbate the financial strain already felt by consumers.

NASPAWAP's call for the suspension of the excise tax underscores their concern for maintaining affordable access to clean water by the public.

They contend that while environmental issues must be addressed, the current economic climate necessitates careful consideration of policies that could further inflate consumer costs.

“We believe the motive for the 5% extra excise tax would be to rake in funds to tackle the menace plastics pose to the environment. There is an existing 10% environmental excise tax on selected plastics at the ports of entry."

"We were part of the decision to tax plastic granules at the entry ports. This method broadens the tax base since all plastic granules are imported. However, at the implementation stage only a selected few were captured,” an excerpt of the statement read.

NASPAWAP has put forward an alternative strategy amidst the debate over the newly imposed excise tax on plastics.

The association's proposal suggests reducing the environmental excise tax rate to 1% at entry points, specifically targeting all imported plastic granules.

Additionally, they advocate for a 10% tax on the Cost, Insurance, and Freight (CIF) value of semi-finished plastics imported into the country.

According to NASPAWAP, this approach aims to enhance revenue generation for effective plastic waste management while mitigating the financial impact on consumers of finished plastic products.

They argue that their proposed tax structure would more effectively support environmental initiatives compared to the current 5% tax on finished plastics, which they believe would disproportionately burden consumers.

“Our suggestion to the government is to reinforce the environmental excise tax at the entry points by reducing the tax rate to 1% and make it applicable to all imported plastic granules without any exceptions.

“However, semi-finished plastics imported into the country should be taxed 10% of the CIF value. We believe this will rake in more funds for plastic management than the additional 5% excise tax imposition on finished plastics.

“We also wish to put on record that since the inception of plastics in this country, all interventions in respect of managing plastic have been solely borne by the private sector. From the collection point to the recycling stations, there has not been any subsidy from the government to the collectors, etc.," the statement added.



NASPAWAP highlighted that the private sector has historically shouldered the entire responsibility for plastic waste management in Ghana. They emphasized that from the collection of plastic waste to its recycling, there has been no financial support or subsidies from the government.

"We want to stress that all efforts to manage plastic waste, from the collection stage to the recycling process, have been funded solely by private entities. There has been no government subsidy for collectors or recyclers," the statement continued.

The association believes that the proposed tax adjustments would not only alleviate the financial burden on consumers but also ensure a more sustainable and effective approach to plastic waste management. They argue that a reduced tax on imported plastic granules, combined with a higher tax on semi-finished plastics, would create a more balanced and equitable system that supports environmental goals without disproportionately impacting consumers.

NASPAWAP's call for an indefinite suspension of the 5% excise tax on finished plastics is rooted in their commitment to keeping water affordable and accessible while also addressing environmental concerns. They urge the government to reconsider the tax structure and adopt their proposed measures, which they believe will generate sufficient revenue for plastic waste management without placing undue strain on consumers.

As the debate over the excise tax on plastics continues, NASPAWAP remains steadfast in their position, advocating for policies that balance economic and environmental needs. Their proposal aims to create a more sustainable framework for plastic waste management that considers the current economic challenges faced by Ghanaians.

The ongoing discussions highlight the complexity of balancing fiscal policies with environmental responsibilities. NASPAWAP's stance underscores the importance of involving industry stakeholders in the decision-making process to ensure that implemented measures are both effective and equitable.

In conclusion, NASPAWAP's appeal to suspend the 5% excise tax on finished plastics reflects their commitment to protecting consumers from additional financial burdens while supporting environmental sustainability. Their alternative proposal offers a potential pathway to achieving these goals through a more targeted and balanced tax structure.