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Textile tax stamp policy to weed out pirated fabrics

BY: Benjamin Xornam Glover TEMA
1. Mr Kweku Adae, Head of Technical Training, TexStyles Ghana Limited conducting journalists on a tour of the production floor

The Director of Sales and Marketing of Tex Styles Ghana (TSG) Limited producers of, GTP, Woodin, and Vlisco, Emmanuel Debrah Kissi, has indicated that the introduction of tax stamps on textiles will protect the textile industry and make it resilient.

The uncontrolled smuggling of pirated fabrics, the unbridled importation of cheap textiles into the country from Asia and counterfeiting are said to be doing great harm to the local industry and since imported textiles are cheap, it moves faster thereby throwing most of the textile dealers out of business.

 The tax stamp policy was introduced by the Ministry of Trade and Industry to combat piracy and counterfeiting to protect the industry and also rake in additional revenues for the state.

The policy, which will be rolled out in March next year, will ensure that only genuine wax prints are imported into the country and traded at the markets and that all imported textiles will be required to enter the country through a dedicated corridor and affixed with the tax stamps.

 Speaking to selected journalists during a media tour of the Tex Styles Ghana Limited production facility in Tema, Mr Kissi said effective October 2022, every fabric produced by the company had a tax stamp affixed on it.

“We are hoping that from January next year, we will help out customers in the trade request for the transitional stamps to ensure that all the fabric in the system has the required tax stamps affixed on them so that they don’t run the risk of the products being seized by the implementation taskforce,” he said.

 

Key challenges

 Apart from the unbridled smuggling of cheap fabrics from Asia, Mr Kissi mentioned the currency depreciation, which had affected the cost of raw materials, including grey and dye, the dwindling trade capital of customers, removal of subsidy on Residual Fuel Oil (RFO) used to power their machines as some of the major challenges that had impacted their sales this year.

He disclosed that the company has had to increase the price of its fabrics more than six times this year in order to cope with the rising cost of production.

 Mr Kissi said the company was enjoying a 55 per cent subsidy on RFO but the government initially reduced it to 40 per cent in July this year and subsequently in November this year the subsidy was withdrawn totally.

He explained that the withdrawal of the subsidy on RFOs had led to an increase in the prices of their products on the market, stressing that the continued increases in the prices of fabrics by Tex Styles Ghana Limited were attributable to the harsh business environment, which had led to a 35 per cent increase in the price of their products this year as compared to last year.

 The Head of Technical Training at GTP, Kwaku Adae, said the company started operation in 1966 as the first indigenous Ghanaian textile brand with an installed capacity of 20 million yards and had revolved from creating and producing quality African prints of Ghanaian heritage into a premium fashion brand.

 The Head of Woodin Business in Ghana, Mavis Kumah, disclosed that Woodin had entered into a collaboration with a shoe manufacturing company in the Eastern Region, The Shoe Fabriek, to produce leisure footwear using quality Woodin fabrics. The collaboration aimed to create employment via a socially inclusive sustainable business model.

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