While affected businesses are proposing a digital system that will electronically emboss the stamps on all excisable products, the government has opted for the physical affixing of the stamps by a specialised machine in the course of production.

As a result of this apparent misunderstanding, the Executive Secretary of the Food and Beverages Association of Ghana (FBAG), Mr Samuel Aggrey, told the Daily Graphic that the association would petition the Presidency and Parliament to help find an amicable solution to the matter.

Checks by the Daily Graphic also showed that no beverage manufacturer, including Guinness

Ghana Breweries Limited, Kasapreko Company Limited, Voltic Ghana Limited, Accra Brewery Limited, Pepsi Ghana Limited and Coca-Cola Bottling Company Limited, had procured or installed the tax stamp affixing machine needed for the smooth enforcement of the policy.

The development raises questions about the ability of the country to start the enforcement of the tax stamp policy meant to keep proper records of the production of bottled beverages and water for the purposes of tax collection.

Further checks showed that the stalemate had already delayed the proposed trial of the stamp affixing that was due to take place between January and February this year.

To participate in the second round of trials, companies are expected to pay a non-refundable fee of US$10,000, an amount the businesses say is unnecessary.

A Deputy Minister of Finance, Mr Kwaku Kwarteng, who is overseeing the processes leading to the enforcement, is yet to respond to requests for comment.

Cost of trial

Ms Joyce Ahiadorme of Voltic (GH) Limited said in a separate interview that although the company was prepared to have the trial, it would not be able to pay the US$10,000 that was required of every company to participate in it.

The first trial was done free of charge for a limited number of companies in January and the government is now requesting those that wish to participate in the second trial to pay for the cost, estimated at US$10,000 per company.

“If the government says it wants to be able to track the payment of excise, which we are already paying, we believe that it is in its interest to have all those trials done,” she said.

Better alternative

Commenting on the state of the beverages industry ahead of the March 1 deadline, Mr Aggrey told the Daily Graphic that members of the association were not prepared for the enforcement of the tax stamp policy.

While explaining that companies in the beverages and water bottling business were not against the policy in principle, he said businesses were generally against its mode of implementation, which he believed could be improved to save businesses the cost and inconvenience.

He said the association had found that the enforcement of the policy would slow down the production timelines of manufactures by some 10 per cent and raise the cost of operation as high as US$3 million per company.

“Beyond the issue with speed, one is to invest between US$500,000 and US$3 million before getting the tax stamp rolling and we are asking: why should it be so?

“Strangely, the cost element is supposed to be borne by the manufacturer and if you do not do it, they will take you to court that you have violated the law.

“We don’t see why a law will ask someone to invest US$3 million or even US$100,000 and if the person does not have it, it amounts to committing a crime,” he told the Daily Graphic last Friday.

He said a more efficient yet less costly alternative was to electronically emboss the stamps on every bottle.

That, he said, would save companies the inconvenience of having to purchase and install the machines.

History of tax stamps

In 2012, the government contracted the USA-based firm, Authentix Inc., to help roll out a tax stamp system, ostensibly to monitor the production and importation of bottled beverages and water.

Under the five-year contract, Authentix was to provide consultancy services, a tax stamp applicator and supply of tax stamps at a value of US$11.8 million.

The firm would also be paid a monthly installation fee of US$982,500 for four years.

Following from that, the Excise Tax Stamp Act, 2013, (Act 873) was passed, making it compulsory for companies that manufacture or import bottled beverages and water to affix the tax stamps on their products before they are allowed into the market.

The law requires manufacturers and importers of cigarettes and other tobacco products, alcoholic and non-alcoholic beverages, bottled water and other excisable products to affix the excise tax stamp on each unit of their products before the products are allowed onto the market.

The affixing is to be done at a place that will make it impossible for a used stamp to be reused.

Per the law, anybody who releases non-stamped products for sale or sells them “commits an offence and is liable on summary conviction to a fine of not more than three hundred per cent of the duties and taxes involved or to a term of imprisonment of not more than five years or to both”.