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Traders continue to sell sachet water at GH10p despite a directive from the Ministry of Finance to sell it at the old price of GH5p. Parliament revealed that it was misled to pass the new law, which imposed a 20 percent tax on sachet water, but the Ministry of Finance stated that sachet water was exempted from the law.

The 20 percent ad-valorem tax, which took effect on March 1, 2010, led to an increase in the prices of 500 millilitres packaged water.

The Act of Parliament (Act 787) imposed a 20 per cent ad-valorem tax on distilled, bottled and packaged water. Members of Parliament (MPs) on both sides of the House, especially members of the Finance Committee that submitted a report on the floor of Parliament and supported the passage of the law, said they were misled because their queries on the subject received affirmative answers from officials of the Ministry of Finance as well as the Customs, Excise and Preventive Service (CEPS).

Kobina Tahir Hammond, MP for Adansi Asokwa noted that the Finance Committee “was clear in the mind that sachet water was not part of the taxes but have been affected by the law and Ghanaians are bearing the brunt.”

Alhaji Mohammed-Mubarak Muntaka, MP for Asawase revealed that “there was some kind of ambiguity.”

Reading an advertisement in one of the dailies by the VAT Service, Joseph Boahene Aidoo, MP for Amenfi East, pointed out that sachet water was specifically mentioned in the publication, stressing that producers were directed to contact the service before the law took effect.

Making the statement to contribute to a motion on the President’s state of the nation address, the Amenfi East MP said government promised not to tax individuals, noting that “there were taxes all over and even the price of sachet water is on the surge.”

Meanwhile, the Ministry of Finance, through the media, has indicated that sachet water does not fall under the law even though MPs have given indication that the law can be reviewed.

“A law cannot be reviewed by a press statement but has to come to Parliament,” said Edward K D Adjaho, Avernor Ave MP and First Deputy Speaker of Parliament.

The First Deputy Speaker, who was chairing the sitting, noted that he did not have a copy of the law at the time, explaining that “if that is what is happening then the proper thing must be done by coming back to Parliament.”

Supporting his colleagues, Prof. Michael Aaron Oquaye, Dome-Kwabenya MP averred that “the power to make or review laws lied with Parliament and not by word of mouth.” “The Finance Minister cannot say what he thinks. VAT Service must continue to collect the taxes otherwise they would breach the law.”

Papa Owusu-Ankamah, MP for Sekondi told the House that government has been asked to bring a bill to revoke the application. “That was not the intention of the law, but I do not know why they are wasting time; they should amend it,” he added.

As a result of the imposition of the 20 percent tax, a bag of the sachet water is currently selling at GH¢1.20p instead of GH¢75p. Retailers are selling sachet water at GH10p, despite a directive by the Association of Sachet Water Producers that they should not pass the cost to consumers.
Source: D Guide/ghana

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