10 Oct 2019
GHANA: Government and Industry Agree on Textile Tax Stamp Policy
The Ghanaian government is set to sign an agreement with stakeholders in the country’s textile industry that will implement the textile tax stamp policy proposed last year.
At a 13 September meeting in Accra, government officials and the Coalition of Textile Workers (CTW), which represents the local industry, agreed on a timeline to implement the new tax policy. This will require textile manufacturers, importers, and traders to ensure approved stamps bearing key security features are affixed to textile prints before they are sold. The signing follows an early September ultimatum from the CTW giving the government one week to implement the measure, along with other proposals to reinvigorate the local textile industry.
Currently, local textile producers are only able to meet about a quarter of the demand in the country, the remainder coming from outside – often illegally. According to the CTW, Ghana’s textile industry is characterised by challenges such as counterfeiting, piracy and smuggling. The tax stamp, first mooted last year, is aimed at curbing textile smuggling into the country and increasing local jobs in the sector. The stamp tax will also help prevent tax evasion at ports, as well as acting as a check against fake and pirated product dumping on the local market.
Although implementation of the policy was supposed to begin in January, the government moved the launch date because it wanted to ensure that additional security features were added to the stamp. The stamp was one of three key measures to be adopted for improving the local textile industry, along with zero-rated VAT for a period of three years and the designation of the Ghanaian Port of Tema as a single-entry corridor for textile print importation. The CTW has, however, stated that except for the zero-rated VAT, the government has yet to implement the other measures.