GRA issues guidelines for repeal of 50% benchmark value on selected imports
The Customs Division of the Ghana Revenue Authority (GRA), has announced the repeal of the 50 percent benchmark value on some selected goods imported into the country.
The reversal of the policy introduced by the government in 2019, the Customs Division of the GRA in a letter to the management of the country’s seaports, managers of the Integrated Customs Management System (ICUMS) and the business community at large takes effect Monday, November 15, 2021.
The repeal of the policy, the Customs Division of the GRA notes, is in view of an agreement reached on the issue following various fora discussions on the matter coupled with an expected revenue increment.
“It has been agreed that discount on some commodities currently being enjoyed should be reversed to achieve revenue effect.
“To this end, November 15, 2021, is therefore, slated for the effective date for the implementation of the removal of the benchmark values on some selected items,” read parts of the letter.
Per the information contained in the letter, imported goods affected by the new directive include sugar, Portland cement, vehicles, palm oil, aluminium finished products, among others.
Peruse below list of imported goods no longer to enjoy the 50% benchmark value
DocScan_11_12_2021 by Fuaad Dodoo on Scribd
In a separate letter to the Commissioner-General of the GRA, the Customs Division outlines procedures or guidelines for the implementation of the new directive by Customs officers.
Per the letter, the implementation of the repealed 50 percent benchmark value will be facilitated through the Integrated Customs Management System (ICUMS).
Already, provisions have been made in the ICUMS for Customs Officers to be able to directly manage the reversal of the benchmark value on the selected goods.
Read details of letter below:
Background
A banter over the removal or otherwise of the 50% benchmark value on imported goods have ensued between the Association of Ghanaian Industries (AGI) and the Ghana Union Traders Association (GUTA).
Whereas the AGI is vehemently opposed to the policy which cardinal objective is to reduce the cost of doing business at the ports and increase compliance in terms of payment of duties and taxes, GUTA says the policy is a good one and should stay.
In an interview, the Chief Executive Officer of AGI, Seth Twum Akwaboah, noted the blanket application of the reduction of benchmark values on all product lines in the country is crippling local industries who are struggling to compete with the over-incentivised imported goods.
Mr Akwaboah explains that the reduced benchmark values of imports combined with major incentives provided for exporting industries overseas has made it very easy for foreign goods to be priced cheaper than the local ones.
“Some of the exports that come into the country enjoy export rebates from their respective countries. Some countries make it a deliberate policy to aggressively export, so when they do, they take out duties and give them concessions, so the goods are shipped into our market at very low prices. So, if you apply further reductions by half, then you are collapsing your local industries,” he notes.
Mr. Twum-Akwaboah said as a matter of urgency, some preferential treatment is supposed to be given to local manufacturing industries to support their growth, and one of the effective ways is by eliminating the 50% discounts on benchmark values of products invested in by local industries.
But the President of GUTA, Dr. Joseph Obeng, on the other hand, has said the reduction on benchmark values has been very beneficial to traders, arguing that it has culminated in the reduction in the cost of importation and by extension, the cost of trading in Ghana.
He said it has also improved compliance levels at the ports, by reducing the incidence of under-invoicing leading to increased levels of government revenues.
“Government is having its worth. From the time this benchmark value policy was introduced, they have exceeded their revenue targets,” the GUTA President expressed.
Dr. Obeng argued that the appeal of the AGI for the scrapping of the benchmark value reduction on imports is a futile approach and would not solve the challenges they are grappling with.
He accused local industries of not pricing competitively leading to traders opting for imported products of relative quality where they are guaranteed reasonable prices.
