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Company News of Friday, April 19, 2019
Source: Myjoyonline.com
2019-04-19
Joseph Obeng, president of GUTA
Two key trade badociations, the Association of Traders of Ghana (GUTA) and the Ghana Industries Association (AGI), have clearly understood the reduction of the reference value of import duties.
The government has recently announced that the reference value of import duties has been reduced by 50%, while that of vehicles alone has been reduced by 30%.
In presenting its badessment of the revised PM Express commercial edition tariffs Thursday, GUTA has described the new import regime as progressive and taking into account the interests and concerns of its members.
However, AGI said the reduction could paralyze local manufacturing industries.
Seth Twum-Akwaboah, General Manager of the AGI, said that while his badociation does not oppose recent reforms introduced in ports, widespread application of imported products is hostile to Ghana's manufacturing sector.
"I think we really have to think about it very well. Because … applying a 50% discount on all goods is problematic. Because if we look at the CET [ECOWAS Common External Tariff], the CET has different tariff ranges to accommodate certain industries in the sub-region – we have local capacity to produce these products and, therefore, they need to be slightly protected.
"There are those for whom we have no local capacity at all, so if you increase the tax so much, you just make the product expensive in your market. They have therefore taken all these factors into account when setting the tariff ranges, explained the head of the AGI.
He stated that AGI members were of the opinion that a lump-sum application of the tariff reform went against the government's desire to encourage local production.
"Imports will become much cheaper than manufactured goods, which means that those who produce, those who manufacture manufactured goods in the country and employ people will become traders," he said.
When manufacturers become traders to benefit from the reduction in import duties, the economy will suffer, he said.
GUTA
But Dr. Joseph Obeng, president of GUTA, is not in agreement.
The AGI's argument is wrong, he said, because the reduction of the reference value is not limited to finished products.
"It goes all the way to raw materials. So, the status quo remains the same. If you want imports to be banned, you have to be bold and tell the government to ban the import, but is it possible? This can not be done because the import is very necessary. It's only helping what we generate locally.
"It's not possible to make everything, you have to see where you have a competitive advantage and produce it. The rules should not be folded for you alone, "he advised.
The government explains the reduction of the reference import duties
The initiative, according to Vice President Mahamudu Bawumia, aims to reduce the high cost of clearing goods in the country's ports, increase import volumes and make the country competitive in the sub-region of Africa. from West.
Speaking at the head of the Economic Management Team (EMT) of a city hall, he explained: "The reference values applied by customs to various products in the calculation of the rights of Imports to Tema are much higher than in Lome, Abidjan and Dakar. In many cases, they are 100 to 200% higher.
"If you take a 2009 Ford Focus model, for example, and go to Tema, our reference looks like it's worth $ 9,000. If we go next to Lome, the same car reaches $ 3,000; and the same car in Dakar is exactly the same price of $ 3,000.
"So it's a problem, and we end up paying double the taxes because the benchmarks are so high compared to Lomé and Dakar."
The government is confident that the reduction of reference values will increase container volumes and increase its revenues in ports.
Between 2013 and 2018, the port of Lomé recorded a 300% increase in the volume of containers (60% per year), while Ghana recorded only a 4.1% increase in volume of containers between 2013 and 2016.
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