The Association of Ghana Industries (AGI) has issued a warning to the government about a proposed policy that would remove taxes on imported sanitary pads without considering the impact on local manufacturers. The AGI argues that implementing such a measure would have serious negative implications for the country’s economy.
Although the idea of waiving duties on imported sanitary pads to make them more affordable for young women may seem attractive, the AGI asserts that it would ultimately lead to the demise of the remaining local sanitary pad factories. The association, in a statement signed by CEO Mr. Seth Twum-Akwaboah, believes that the call for removing duties on imported sanitary pads is misguided.
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The AGI highlights the challenges faced by local sanitary pad manufacturers due to the influx of cheap and sub-standard imports. These imports are sold at discounted prices, putting significant pressure on domestic producers. Consequently, 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 become mere importers. The association argues that instead of granting tax waivers to imports, the government should provide incentives and support to enable local companies to meet domestic demand. This approach would help protect jobs and retain foreign exchange within the country.
Local manufacturers of hygienic sanitary pads have specifically petitioned the government, requesting exemption from Value Added Tax (VAT) and import duty on imported raw materials. They believe that such tax relief would result in more affordable sanitary pads for approximately 70% of young women in impoverished communities.
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The AGI cautions the government against yielding to public discourse and social commentary advocating for the elimination of import duties on sanitary pads. Instead, they emphasize the importance of considering local manufacturing, job creation, and revenue generation for the government. The association urges the government to focus on its industrial transformation agenda by incentivizing local manufacturers rather than relying on imports.
The AGI points out that several countries have implemented countervailing taxes to safeguard their local markets. They caution against Ghana adopting the opposite approach by removing taxes on imported sanitary pads, especially when local factories are capable of producing the same products. The association stresses the need for careful consideration of the potential consequences of such a policy shift.
