Consumers of sachet water no longer have to pay more than the current GHp5 they pay for the product. This follows a decision by government to scrap the controversial 20 percent ad valorem tax recently imposed on sachet water.
In a statement issued to Joy Business, the Ministry of Finance and Economic Planning said it had taken the action after noting the debate on the implementation of the 20 percent ad valorem excise tax on �distilled, bottled and other packaged water�.
The Act of Parliament (Act 787), which imposes the tax was supposed to take effect from Monday, 1 March 2010. The Ministry said the tax does not apply to sachet water.
A committee constituted by the Minister of Finance, Dr Kwabena Duffuor is still engaging all stakeholders and will come out with its decision as soon as there is mutual understanding over the matter.
The exemption of sachet water settles a raging debate over whether the drafters of the law intended the tax to be imposed on sachet water in the first place.
Whilst the Value Added Tax Service (VAT) insists sachet water falls under the packaged water classification, the Parliamentary Select Committee that wrote the law says it never intended the tax to be imposed on sachet water.
Meanwhile sachet water producers have been swiftly directed to revert to the old price. President of the Union of Sachet Water Producers, Magnus Nunoo, urged retailers of the product to comply with the directive.
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