Government has proposed that tax stamp policy should be extended to the textile industry.
Presenting the 2019 budget in Parliament yesterday, the Finance Minister, Ken Ofori-Atta said the move would curtail smuggling and counterfeiting in the textile industry.
The tax stamp policy emanates from the Excise Stamp Act, 2013 (Act 873).
In accordance with the Act, specified excisable products which are imported or locally produced, are required to be affixed with Tax Stamps with specific features designed and supplied by the Ghana Revenue Authority (GRA) before they are delivered ex-factory, cleared from any port of entry or presented for sale at any commercial level in Ghana.
However, government believes the introduction of the tax stamp policy in the textile industry would enable them identify fake textiles and also curb smuggling in the market.
When this is approved, manufacturers would be required to affix tax stamps on their products before it gets on the market.
The textile industry in Ghana is currently facing competition from cheap copies smuggled in from abroad, especially from China.
Local manufacturers and dealers are forced out of business with the influx of cheap pirated fabrics.
Zero VAT Rate on Textiles
Observing the high cost of production face by the industry, government has also proposed a zero VAT rate on the supply of locally made textiles for a period of three years.
“The local textile industry is further faced with high cost of production which have resulted in high prices at the retail level. In order to support the local in the industry and make them price-competitive, government proposes to zero-rate VAT on supply of locally made textiles,” he announced.
About Tax Stamp
In accordance with the Provisions of the Excise Tax Stamp Act, 2013 (Act 873) specified excisable products which are imported or locally produced, are required to be affixed with Tax Stamps with specific features designed and supplied by the Ghana Revenue Authority before they are delivered ex-factory, cleared from any port of entry or presented for sale at any commercial level in Ghana.
As part of measures to ensure the smooth and effective implementation of the Tax Stamp programme, all importers and manufacturers of the affected products are required to register with the Ghana Revenue Authority (GRA).
The registration is mandatory under section 4 of the Act and it shall among others, enable GRA grant user access to the Tax Stamp Portal to the registered taxpayers for the administration of the programme.
By: Emmanuel Yeboah Britwum