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Retail: Ghana taxes bottled water

The price of bottled and sachet water is to increase by 20 per cent in Ghana as of 1 March, Citi FM reports. The increase is the result of an agreement between producers and the finance ministry concerning the introduction of value-added tax (VAT) on certain beverages including water.

Producers initially expressed reservations about the levy and its impact on consumers in a country where many people have no choice but to buy drinking water in bottles or plastic sachets due to lack of alternative supplies. However, the government has argued that the tax is on the packaging, which builds up as rubbish causing blockages to drainage channels and flooding, rather than on the water itself.

Producers of bottled and sachet water have warned that in reality prices could increase by anything from 10 to 100 per cent. Bottled water currently sells for 1 Ghana cedi for a 1.5 litre bottle or 50 pesewas for 500 ml, while 500 ml water sachets sell for 5 pesewas.

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