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Company News on Tuesday, July 16, 2019
Source: starrfm.com.gh
2019-07-16
Government reduced reference value for imports and vehicles
There was a significant increase in imports to Ghana three months after the government imposed import duty reduction, said the Ghana Trade Union Association (GUTA).
In April, the government reduced the reference value of imports by 50%, while the reference value of vehicles was also reduced by 30%.
Some importers, including spare parts dealers, welcomed the announcement. However, the Ghana Industries Association (AGI) criticized the cut and predicted that it would make local businesses disappear.
Vice President Mahamudu Bawumia, Vice President of the Economic and Monetary Affairs Committee, announced the reduction at a public meeting organized by the Directorate General of Economic Affairs.
According to him, the available data showed that the traffic in the port of Lomé had increased by 300% between 2013 and 2018, while Ghana had increased slightly by 4% during the same period.
In a statement dated 16 July, GUTA said the reduction encouraged companies to import, especially items that were previously difficult to import into the country because of high tariffs that make their prices uncompetitive.
"The profit from the reduction so far has allowed most companies to transfer some of the benefits of the price reduction, ranging from 10% to 15% to the consumer.
"This reduction could have been even more important, but for other factors such as the balance of the price of new goods compared to the old stock," the statement said, adding: "The most of the gains have also been reflected in the stability of prices in the market, even in the deep depreciation of the currency. "
Below the complete statement
Press release on the effects of the reduction of the reference value up to now
It can be recalled that due to the persistent call of the business community for the reduction of high import duties, the government announced in April 2019 a 50% reduction in the reference value of imported products and 30% of the calculated value of the vehicles.
Three months later, we worked successfully with the Ghana Revenue Authority – Customs Division on most modalities involving different product lines and still working on the remaining few.
After that, companies are encouraged to import, especially items that were previously difficult to import because of high import duties, which make their prices uncompetitive.
The gain from the reduction so far has allowed most companies to transfer some of the benefits of price reduction – ranging from 10% to 15% to the consumer.
This reduction could have been even more important, but for other factors such as the price balance of new products compared to the old stock.
Most of the gains have also been reflected in the stability of prices in the market, even in the midst of currency depreciation.
It is a fact that some categories of goods have not been reduced because the terms involved in their values are not yet complete.
We also expect prices to fall further, especially if the exchange rate remains stable. Keeping in mind that competition is the best price determinant on the market.
We are by this statement, urging all importers to share the benefits of the discount with the consumer.
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