AGI expresses dissatisfaction with reduction in benchmark value policy
The Association of Ghana Industries (AGI), has expressed dissatisfaction with the reduction of the 50% benchmark discount value to 30% for general goods and 10% for vehicles.
The Association has noted that the review of the benchmark policy will not proffer solutions to the concerns of local manufacturers.
It revealed this in a press release following the government’s directive to reduce the benchmark value policy on general goods and import discount on vehicles from 50% to 30% and 30% to 10% respectively.
‘’Our attention has been drawn to a reduction of the 50% benchmark discount value to 30% for general goods and 10% for vehicles while consultation was still in progress. This revision by Government does not offer solution or address the concerns of local manufacturers. While we acknowledge efforts by Government to address this distortion, we are very dissatisfied with this review,’’ the AGI said.
Government has reduced the controversial benchmark value policy on general goods and import discount on vehicles by 20 percentage points.
The reduction comes after a consensus between the Finance Minister, Ken Ofori-Atta, and the leadership of the Ghana Union of Traders Association (GUTA), Association of Ghana Industries (AGI), Importers and Exporters Association, Ghana Institute of Freight Forwarders [GIFF] and the Ghana Revenue Authority.
Government introduced the benchmark value policy discount in 2019, which is in accordance with the World Customs Organisation policy of regular review of valuation database.
The implementation of the reversal of the benchmark value policy was later suspended by the Ghana Revenue Authority (GRA) until further notice.
Reports indicate that, the government may implement the new adjustments in March 2022 as preparations are underway for a final announcement of the said day.
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AGI believes that the revision of the benchmark policy will have to take note of the country’s industrial transformation agenda, competitiveness of local industry and fair-trade practices.
‘’AGI believes that the revision of the benchmark discount policy will need to take cognizance of the overarching framework of Ghana’s industrial transformation agenda, competitiveness of local industry and fair-trade practices’’.
The Association further stated that the revision does not restore the status quo of local manufacturers and does not achieve the desired impact the Association needs.
It further disclosed that it is anxious on seeing the reversal in manner that will not constraint local businesses, but rather sustain business operations.
‘’After bearing the brunt of this policy for over two years, it has been our expectation that the revision will spare us further stress. AGI wishes to state that a review from 50% to 30% for general goods and 10% for vehicles does not restore local manufacturers to the status quo, let alone competitiveness.
“This will not achieve the desired impact and we consider this not adequate enough to ensure competitiveness of our manufacturers. Indeed, we are disappointed. We are anxious to see a reversal of the benchmark discount policy in a manner that does not constraint local industry, to sustain business operations.
“Since Government has indicated a gradual reversal of the benchmark discount policy, we will like to see a road map with timelines for this process. Policies of this nature should be consistent with Government’s initiatives of industrialization, in order to create the employment opportunities for our youth, especially where Government is seeking to create one million jobs as well as address its revenue shortfalls. We expect to see a policy revision that motivates local production for growth of our economy and the development of our local supply chains,’’ it remarked.
The Association is therefore calling on government to retain the 50% benchmark discount for raw materials to help boost manufacturing and capacity for AfCFTA.
“Our manufacturing sector constitutes a critical mass of our real economy and therefore it is important to retain the 50% benchmark discount for raw materials to help boost manufacturing and export capacity for the Africa Continental Free Trade Area (AfCFTA),’’ it added.
