Bottled water producers threaten gov’t over tax

bottled-waterSome retailers of bottled water have threatened to resist any moves by government to introduce taxes on bottled water. Government has announced it may introduce taxes on bottled water as part of moves to increase revenue as well as widen the country’s tax net.

The production of bottled water in the country has seen several taxes slapped on producers and manufacturers, a situation which is said not to be helping in encouraging industry in the sector.

Currently, sachet water manufacturers have to pay a 10 per cent excise duty or an environmental excise duty on the plastics imported for the bottling of water at the point of entry of the raw materials into the country. A further 17.5 per cent is charged as ex-factory price tax, comprising charges on the labour, water bottled and profits. Therefore producers then have to pay VAT of 17.5 per cent. The total works out to about 45 per cent of taxes paid by water producers on bottled water only.

Most Ghanaians are unhappy with the taxes and say they are prohibitive.

Consequently,  the importation of bottled water into the country is on the rise as imported water is cheaper than that produced locally.

Retailers of bottled water across the country are cautioning government against any new tax. “That does not make any sense, already the economy is bad. We have a whole lot of taxes already imposed on bottled water so why does the government want to add on to cripple the business”.

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