Ghana seeks to revive textile industry with new tax stamp policy

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Ghana is hoping to revive its once buoyant textile industry with a new tax stamp policy.

The policy which is to take effect mid-November this year, will see all textiles—both locally made or imported— affixed with a specially designed tax stamp sticker before they could be traded on the market, as a measure to block avenues for smuggling, design piracy and tax evasion.

According to Deputy Trade and Industry Minister, Robert Ahomka-Lindsey, this intervention has become very critical to help save the ailing textile industry while ensuring that the right taxes are paid to the state.

Speaking to journalists at a sensitisation event for top Customs officers and a section of the textiles dealership in Denu, near Ghana’s border with Togo at Aflao in the Volta Region, he said: “As a government, if we are keying on industrial transformation, one of the most obvious areas that we have the competitive advantage is in the design or textile manufacturing industry.

“We are not against importation but when you do import the textiles, you have to pay the taxes on them so government can get revenue to develop the country and at the same time, help build businesses.”

He added: “We are looking to address a number of issues: encourage local manufacturing of textiles, inspire people to buy made in Ghana and stop the piracy of designs.”

The tax stamps to be affixed on textiles comes in two different colours—one for Ghana-made textiles and the other for imported ones, with a 2D scannable code that gives real-time feedback to Customs concerning tax compliance or tells the genuineness or otherwise to the buyer.

Textiles dealers or buyers without a smartphone can scratch the sticker to reveal a secret code that will have to be sent to a toll-free number to access the same details on the textile product.

In the late 1980s, the textiles industry employed about 30,000 people but the sector now has a current workforce of about 1,200.

This has been the outcome of sustained challenges in the industry such as smuggling, pirating of designs and under-invoicing/under-declaration.

“We know that there is a huge challenge with the textiles sector; for instance, I’m reliably informed that in 2017, only one container was officially cleared for tax in this country.

This is clearly not possible because we know that over 70 percent of textiles that we buy in this country are not manufactured here,” Mr. Ahomka-Lindsey noted.

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