The Association of Ghana Industries (AGI) has cautioned the government against implementing a policy that would remove taxes on imported sanitary pads while disregarding local manufacturers.
According to the AGI, such a measure would have severe negative consequences for the country’s economy.
While the idea of waiving duties or taxes on imported sanitary pads to make them more affordable for young women may seem appealing, the AGI argues that it would inevitably lead to the demise of the remaining local sanitary pad factories.
In a statement signed by CEO Mr. Seth Twum-Akwaboah, the association expressed its belief that the call for the removal of duties on imported sanitary pads was misplaced.
The AGI highlighted the challenges faced by local sanitary pad manufacturers due to the influx of cheap and sub-standard imports. These imports are sold at closeout prices, putting immense pressure on domestic producers. As a result, the few local manufacturers capable of expanding their operations are currently operating at only 30% capacity.
According to the AGI, completely eliminating taxes on imported sanitary pads would either collapse the remaining factories or force them to transition into mere importers. The association argued that rather than granting tax waivers to imports, the government should provide the necessary incentives and support to enable local companies to meet domestic demand. This approach would help preserve jobs and foreign exchange within the country.
In their petition to the government, local manufacturers of hygienic sanitary pads have specifically requested exemption from Value Added Tax (VAT) and import duty on imported raw materials. They believe that such tax reliefs would result in more affordable sanitary pads for approximately 70% of young women in impoverished communities.
The AGI cautioned the government against succumbing to public discourse and social commentary advocating for the elimination of import duties on sanitary pads. Instead, they emphasized the importance of considering local manufacturing, job creation, and revenue generation for the government. The association urged the government to focus on its industrial transformation agenda by incentivizing local manufacturers rather than relying on imports.
The AGI pointed out that several countries have implemented countervailing taxes to protect their local markets. They cautioned against Ghana taking the opposite approach by eliminating taxes on imported sanitary pads, especially when local factories are capable of producing the same items. The association emphasized the need for careful consideration of the potential consequences of such a policy shift.
Source: graphic.com
