Plastic manufacturers threaten one-week shut down over GRA’s 5% excise tax

The Ghana Plastic Manufacturers Association (GPMA) has voiced strong opposition to the government's new 5% Excise Tax on all locally manufactured plastic products, calling for its immediate suspension and for a broader stakeholder consultation.

At a press conference held on June 26, 2024, the President of GPMA, Mr Ebo Botchwey, expressed frustration over the lack of response from the Ministry of Finance.

The GPMA had previously requested a delay in the tax's implementation to allow for better consultation, but no feedback has been received since their formal letter on April 24, 2024.

Despite the pending request, the Ghana Revenue Authority (GRA) has begun issuing demand notices to plastic manufacturers, compelling them to comply with the new tax from June 21, 2024, or face penalties and potential shutdowns.

The GPMA has called on the GRA to halt these actions until the tax's ambiguities are clarified.

The GPMA highlighted the concurrent burden of an existing 10% Environmental Excise Tax on selected plastic materials at entry ports, emphasizing that the new tax would be "obnoxious and retrogressive" for the manufacturing sector.

The Association warned that this tax would significantly impact various industries reliant on plastic products, including food and beverage, retail, water, and pharmaceuticals, ultimately leading to higher consumer prices.

The GPMA also underscored the significant contributions of the plastic industry to Ghana's economy, including direct employment to over 39,260 people, generating millions of jobs in plastic waste recycling and the sachet and bottled water industry.

He noted that the industry's substantial payments in import duties, electricity bills, and corporate taxes were highlighted, along with concerns about illegal sales of plastic raw materials by Free Zones Companies.

The Association reiterated its position, calling for the suspension of the 5% Excise Tax, comprehensive stakeholder consultation, and a clear definition of locally manufactured plastic products to avoid ambiguity.

The GPMA also appealed to Vice President Dr. Mahamudu Bawumia to intervene, warning that the tax would lead to severe hardships for ordinary Ghanaians.

In conclusion, the GPMA issued an ultimatum, demanding a response from the government within one week, failing which they would consider a week-long shutdown of all plastic manufacturing operations, potentially sending over 30,000 workers home.