July 13, 2024
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Over 30,000 jobs are at stake – Plastic Manufacturers warn govt over 5% tax

Over 30,000 workers in Ghana’s plastic manufacturing sector may face layoffs, and production plants could shut down if the Ministry of Finance proceeds with the planned implementation of a 5% tax on locally manufactured plastics.

That’s according to the Ghana Plastic Manufacturers Association (GPMA).

Sachet and bottled water producers have also indicated they would be compelled to stop production for one week if the tax is enforced.

The Ghana Plastic Manufacturers Association (GPMA) has issued an ultimatum to the government, describing the tax as detrimental and regressive.

President of the Ghana Plastics Manufacturers Association (GPMA) Ebo Botchwey, warned that the tax would lead to increased prices for essential products such as medicines, beverages, and sachet water, which rely heavily on plastics for production and packaging.

“Let’s defer the implementation of this tax. The timing is not right, especially when businesses are already suffering from the effects of the exchange rate,” Mr Botchwey stated.

“We have been burdened with numerous taxes, and imposing another one now shows a disregard for the growth of businesses. Many companies are relocating from Ghana due to the high cost of doing business, and we are losing our competitiveness. Most imports now avoid the Tema port, opting for Eastern and Western corridors instead. What will be achieved by raising taxes and driving prices up?” he quizzed.

President of the Association of Sachet and Packaged Water Producers, Magnus Nunnoo echoed these concerns. He explained that they would be forced to shut down their production plants for a week, as it is not feasible to package water in paper.

“So our position on the 5% excise tax still stands as follows: That the implementation of the 5% excise tax on factory price of all locally manufactured plastic products and packaging will be suspended immediately and indefinitely,” Mr Nunoo declared.

“We need a comprehensive stakeholder consultation on any excise tax on locally manufactured plastic products. It is unfair to impose such a tax on items like plastic chairs, tables, buckets, household wares, water tanks, PVC pipes, plastic crates, paint gallons, industrial containers, lubricant and engine oil containers, biscuit wrappers, combs, and rice sacks. We appeal to Vice President Dr Bawumia to intervene, in this matter because the effect of these consumer taxes would really affect the masses, the common man, the common woman who suffer extreme hardship.”

He added, “We ask that GRA should stop the harassment of plastic manufacturers and we give the government, the Ministry of Finance one week to respond to our request or we shall have no other option than for all plastic manufacturers to shut down production for at least one week and, of course, we will send home over 30,000 workers, we sincerely pray to God that we don’t get to that stage.”

The President of the Ghana Union Traders Association, GUTA Joseph Obeng also highlighted the broader implications of the tax.

“If GPMA, the main body that supplies our packaging materials shuts down, what does it mean? There will be no bottled water, sachet water automatically, and we have to fall in line by default because we can’t package it in paper, we still have to package it plastic materials be it bottled water or sachet water.”

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