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Ghana waives VAT for textiles

Ghana has decided on zero-rate value-added tax for the textile industry.
This is aimed at reviving the industry, making it competitive, reducing the cost of operation and will be valid for a period of three years.

The value added tax was bleeding textile companies. The tax component meant the cost was passed on to the depots, wholesalers, retailers and ultimately customers, who had to pay higher prices.

The textile industry in Ghana has been struggling to meet the demands of the market due to the smuggling in of unregistered and cheap textiles from other countries. The high operational cost has also led to the shutdown of some of the textile companies, which has robbed many Ghanaians of their jobs. The textile sector which had a workforce of nearly 30,000 barely has 3,000 now.

The textile industry in Ghana is facing serious difficulties. Workers are being laid-off because of the pace of smuggling of cheap and fake prints from China. The market is flooded with counterfeit textiles. The tax stamp on fabrics will set up a task force to arrest those selling pirated materials. Togo and Ivory Coast are often the entry point for smugglers, with some Ghanaian market traders even travelling to China to collect designs. The borders are very porous with only a few of them manned by security people, making it very easy for these counterfeiters to pass through.