The proposed 20 percent ad-valorem tax on bottled and sachet water as well as some other beverages is now bound to take effect as a stakeholder consensus has been reached over its implementation measures.
This came up as the major resolution of the pertinent stakeholders deliberations held Last Friday, January 29th.The stakeholders included representatives from the Finance Ministry, VAT service, CEPS and the Packaged Water Producers Association.
The tax is now bound to be implemented despite initial concerns expressed by the producers that it only has far reaching negative implications for consumers especially in terms of the price of their products.
The Managing Director of VOLTIC Ghana and member of the Packaged Water Producers Association Jason Schmidt, in an interview with Citi Business said they are affected by consumer prices because of the impact at the consumer level, specifically on sachet, if you got about 20 percent.
He added that the 20% increase will push the previous price of 5 pesewas to about 10 pesewas since there are no or less prospects of 6 and half to 7 pesewas "You would not even be able to administer one pesewas so that impact too is fairly severe but we�d hoped to respect a small interval�.
He noted that all this will go back to the effective means of collection which are working with government to ensure that the although we cant do anything about the extra tax, we have to do all we can to make sure that there is a free and equitable tax collection processes.
He said a joint-stakeholder task force was also up to ensuring the effective implementation of the initiative by establishing the modalities for the collection of the tax.
And this, Mr. Schmidt says they however regard this as a positive sign of government�s commitment to mutual benefits in such private sector discussions.
Meanwhile, Government has explained the tax is an environmental tax targeted at the packaging materials as pollutants rather than a necessity like water. The stakeholders have therefore now agreed whilst the tax for sachet and bottled water producers takes effect from March 01, and that of other beverage producers is to take retrospective effect from Jan 01.
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