Tuesday, 9 April 2019

Stakeholders react to 50% import duty reductions...caution public

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Adnan Adams Mohammed


Key stakeholders related to the country’s economy and trade have all given mix reactions with regards to last week announcement of 50 percent benchmark review of import duty reduction for goods but 30 percent for cars, effective last week.

“This mitigation by the government, somebody may see it as negligible but it is very essential,” President of Ghana Union of Traders Association (GUTA), Dr Joseph Obeng has said, adding that, import duty reform introduced, last week, by the government is consistent with demands they have put before Customs countless times during negotiations.

GUTA, a major beneficiary of the announced reduction in import duties dismissed concerns that the recently announced reduction in benchmark values of import duties is insignificant as asserted by the minority in parliament and the Association of Ghana Industries (AGI).

Cassiel Ato Forson, the Minority spokesperson on Finance has noted that, the reform will not yield the needed relief that GUTA and other importers have been demanding.

“No. Unfortunately, the World Trade Organisation and our laws – the Customs Act – frowns on benchmark valuation. It is something that is prohibited by the World Trade Organisation, the World Customs Organisation and the laws of Ghana. Per the laws of this country, the Customs Act, Customs can only apply import duties, as approved by Parliament on invoice values. Benchmark values are only used for the purposes for risk management and cannot be used for import duty purposes,” the former Deputy Finance Minister said.

Consequently, the AGI has cautioned importers against getting too excited about the new reforms because the benchmark duty reduction does not mean a reduction in duties.

Chief Executive Officer of AGI, Seth Twum Akwaboah explained that, the benchmark values do not “add much” because they become inapplicable if importers are declaring the right values.

He admits, however, that a total invoice value reduction in import rates would have catastrophic effects on Ghanaian industries, suggesting that it would have opened the flood gates for imports.


But, Dr Obeng of GUTA defends that, the benchmark values have been used for many years – even under NDC’s administration which Mr Forson served under – so for him to suddenly claim it breached the law and international protocols was disingenuous.

“If your goods have been uplifted before, if something that you were supposed to pay US$20,000 but after applying the benchmark you are going to pay US$80,000, that is when you will see how significant this is,” he said.

The head of the finance department of the University of Cape Coast, Professor John Gatsi has challenged the authority of the Vice President Dr. Mahamudu Bawumia over the port duty reduction announcement he made at the Town Hall meeting last week.

According to the economist, there is no law that permits the Vice President to declare reduction in port charges without the approval of parliament.

Dr Gatsi said the announcement that the charges takes effect today may not materialize because of the various stages that must be satisfied before implementation

“There is no law that grants the Vice President the power to make such announcements, he will have to go to parliament and seek approval and show the House the impact of how that change can have on revenue mobilization for the country,” he said.

Ato Forson further explained that, the benchmark value is a set value Customs assigns to specific good that it will use for import duties computation when the invoice value of the good is deemed too low.

“For instance, if you bring in an electrical cable and the invoice value is GHS4.00 and Customs benchmark value – which is the gazetted Customs value – is say GHS6.00. You [importer] are saying is GHS4.00 and they are saying GHS6.00. So there is a difference of GHS2.00.

“What the Vice President is saying is that GHS2 will be reduced by 50% [and 30% if it is a vehicle]. If they are to reduce the entire GHS6 by 50% then it means they are reducing it below your invoice value which is GHS3, instead of the GHS4,” he said.

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