Time to take second look at import taxes, tax exemptions

One of the key components of Ghana’s trade policy is the government’s twin strategies of export-led industrialsation and domestic market oriented industrialisation based on import competition which rely on the smooth passage of goods and services across Ghana’s borders.

This is expected to be facilitated by the government through lower cost to make it easier to trade in and out of Ghana.

Based on this policy, governments over the years have sought to enact laws that would bring relief to traders and also stimulate development.

Some of the reliefs came in the form of tax exemptions which the Minister of Finance, Ken Ofori-Atta, stated in this year’s budget statement that it was negatively impacting on the government’s revenue.

However, one major concern of traders has been high import duties slapped on goods imported into the country.

The import duties, that form a significant component of taxes collected by the government for development, have become controversial.

It has become a political chess game with importers accusing government of levying high import charges regardless of the efforts that are made to bring relief to them.

Currently importers, especially spare parts dealers have complained bitterly about the high import taxes and threatened to embark on demonstration.

Another group, luxury car dealers and importers also made similar threats following the imposition of an annual levy on vehicles with engine capacities ranging from 2.9, 3.0, 3.5 and 4.0.

Concerned with the threats and complaints, the Council of State met with President Nana Addo Dankwa Akufo Addo behind closed doors to discuss, among other issues, the high import taxes and tax exemptions.

The Ghanaian Times reported that prior to the meeting with the President, the Council of State met with key stakeholders, including Customs Division of the Ghana Revenue Authority (GRA), Ministries of the Trade and Industries and Finances as well as the Ghana Union of Traders Association (GUTA), all in the hope to find solution to their concerns.

Although details of the outcome of the meetings have not been made public yet, we believe that it is time all the stakeholders went back to the negotiation table to have frank discussions about their issue.

We hope that the meeting between the President and the Council of State produced positive outcomes that would satisfy both the government and the importers.

It is important not to forget that the government needs revenue to develop the country and the importers also must pay taxes that would not collapse their businesses.

That is why there is the need for dialogue in order to arrive at the decision that would satisfy all the parties.

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