The government is taking steps to change the transit regime permits to ensure that the right duties are paid on goods meant for transit before transferred to the designated destination country.
The move is to help curtail the influx of illegal goods which was meant for transit but found it way into the country’s market and was having enormous strain on the viability of many local companies, as well as denying the government of huge revenue.
The Minister of Finance, Mr Ken Ofori-Atta, who disclosed this at the presentation of the 2018 Budget and Economic Statement to Parliament on Wednesday, November 15 in Accra, said modalities would be developed to ensure that transit importers paid the duties on imports in Ghana.
The budget was on the theme, “Putting Ghana Back to Work.”
“The transit regime permits the clearing of transit goods without payment of duty. Modalities will be developed to ensure that transit importers pay the duties on import
He observed that the customs suspense regime permitted importers to suspend payment of import duties because the imports were to be kept in bonded warehouses.
“There are evidence that these trade facilitation arrangements are being abused. To remedy this and reduce the risk to revenue, importers will be required to submit Letters of Credit (LC), guarantees or insurance cover from participating financial institutions before their goods are warehoused,” he said.
He explained that the duties paid on goods removed from the warehouses would be set off against the LC sum.
Under this new policy, he said, current defaulters would be required to settle all their arrears, including penalties, before they would be permitted to warehouse additional goods.
Deployment of fiscal electronic device
Mr Ofori-Atta observed that the frequent audit (or control verification) of businesses had been a source of concern for the business community.
He said in response to these concerns, the government, in 2018, would deploy the Fiscal Electronic Device to Value Added Tax (VAT)-registered businesses.
That, he said, would have the effect of VAT compliance and record keeping.
Improving property tax collection
The finance minister stated that the country’s Constitution enjoined Metropolitan, Municipal and District Assemblies (MMDAs) to mobilise revenue for the provision of services.
He stated that a major source of revenue was property tax, collection of which was low due to insufficient valuation capacity and the high cost of valuation.
“To enhance efficiency both in the valuation of properties and revenue collection process from this source, in 2018, the GRA will collaborate with the Ministry of Local Government and Rural Development (MLGRD) to support the MMDAs in the assessment and collection of property taxes,” he said.
He noted that in the 2017 Budget Statement and Economic Policy, the government stated its intention to use tax policy as a tool to stimulate investment and to shape economic behaviour.
Deploy better practice
However, the Vice-President of the Shipowners and Agents Association of Ghana (SOAAG), Mr Adam Imoru Ayarna, said the change in the transit regime permits was not the best practice to curb the influx of illegal goods.
He suggested that the government should have adopted a regime where stronger tracking systems with tamperproof would be fixed on the vehicles that transport the goods meant for transit.
He explained that the change in the transit regime permits would push traders in that business to patronise other ports within the West African sub-region.
“I can tell you that although the designated destination country will be happy about this development, the traders involved will not be happy above the move.
“This is simply because the traders involved will not like to pay duties on their goods in Ghana because they will not be able to negotiate for reduction, a situation which is permissible in their home countries,” he said.
Mr Ayarna predicted that Ghana would lose business to other neighbouring ports such as Togo, Cote d’Ivoire and Nigeria as a result of this directive of the government. — GB