AFTER barely four years into the implementation of the Common External Tariff (CET), a Harmonised System (HS) to usher in a uniform import tariff regime in the West African Sub region, the Ghana Union of Traders Association (GUTA) says port duties have doubled, festering import trade.
The President of GUTA, Dr Joseph Obeng said, “With the coming of the CET, most of the component which consist of the duty has gone up”, increasing import duty rates to some 52 per cent of the working capital of traders in the country.
The CET is to ensure transparent customs procedures, reduce border delays and facilitate intra-regional trade.
Although regional trade increases the number of goods that domestic consumers can choose from, decreases the cost of those goods through increased competition and also allow domestic industries to ship their products to other ECOWAS member states, the implementation of the CET isn't widely accepted as been completely beneficial
Aside the rise in import duties, the implementation of the CET, according to GUTA, was at the detriment of importers in the country who had to compete with other West African based importers who take advantage of the protocols under the CET to flood the market with imported products under the guise of manufacturing them in an ECOWAS member state.
“ Some Nigerians import goods from China and repackage them as if they were manufactured in Nigeria and then ship it into Ghana, enjoy tax exemptions which means they can sell for cheap, while we contend with higher tariffs,” a member of GUTA told the GRAPHIC BUSINESS.
With the implementation of the CET, same customs duties, import quotas and other non-tariff barriers to trade apply to all goods entering the ECOWAS sub region, regardless of which country within the area they are entering.
Govt assures review
Meanwhile, the Finance Ministry says it is working on reviewing tax exemptions it has granted under the (CET).
A Deputy Finance Minister, Mr Kwaku Kwarteng, at a meeting with GUTA on June 18 assured the traders that some exemptions granted importers would be substituted with other ones that are more suitable.
He said the tax review had become the best option as the government has “almost exhausted” the tax exemption quota.
“The policy guidance we have from our government is that we take a second look at the range of exemptions that we have granted under the CET and to see which ones we can begin to switch,” he said.
He says after the preliminary work is done, the Finance Ministry would engage GUTA to come to a consensus on what existing tax exemption to swap with the upcoming ones.
The ECOWAS Common External Tariff
The ECOWAS Common External Tariff (CET) was implemented to provide better trade policy across the sub-region.
This includes applying special protection measures aimed at addressing any trade imbalances across member states thereby providing a real boost to the manufacturing sector and trading in general.
The decision to have a Common External Tariff was taken at an extraordinary meeting of the Conference of Heads of State and Government of the Economic Community of West African States (ECOWAS) held in Dakar, Senegal, October 25 2013. — GB