Ghanaian lobby group proposes a waiver of excise tax on bottled water

GHANA – The Association of Ghana Industries (AGI) is calling for an excise tax waiver on bottled water in the midyear budget review as it would help make companies in the sector more competitive and productive.

The Association said that Ghana’s excise rate of 17.5% on bottled water was already significantly higher than the Economic Community of West African States (ECOWAS) recommended limit of 10% for non-alcoholic beverages which exempts water.

In a statement signed by the Association’s President, Dr Yaw Adu Gyamfi, AGI said that the high excise regime on bottled water is a major challenge to the business.

AGI, which has over 1200 members from the manufacturing and services industries, also noted that many countries in the sub-region do not levy excise on bottled water, the Ghana News Agency reports,

“Examples of countries that do not levy excise tax on bottled water include Benin, Burkina Faso, Côte d’Ivoire, Mali, Niger, Nigeria, Senegal, Guinea Bissau and Togo and we therefore propose a waiver of this excise tax on bottled water,” AGI said.

According to the Association, it does not expect any new taxes in the forthcoming midyear budget review but rather expects a revision of some of the existing tax policies.

The association called on the government to, as a matter of urgency, help develop local production capacity through incentivising industry especially with coming into force of the African Continental Free Trade Area (AfCFTA) agreement.

AGI argued that imported products, which compete locally made products and for which Ghana has competitive advantage and local production capacity should not be duty free.

This, according to the association, would enable Ghanaian industries to fully leverage the opportunities of the agreement, otherwise the country could be marginalised.

However, it welcomed the quarterly exchange rate fixing regime introduced by the government – even though it appears to be a short-term measure.

“AGI will like to see measures that will help change the structure of our economy towards export market development to reduce the persistent pressure on the cedi,” the association noted.