Importers are unhappy with scrapping of discount policy on import duties -ACHAG

The President of the Association of Customs House Agents, Ghana (ACHAG), Yaw Kyei,  has revealed that currently, importers are unhappy with the complete reversal of discount policy on import duties at the ports.

According to him,  many importers hurried to pay their duties ahead of the January 1 deadline in order to avoid paying more later.

Mr. Yaw Kyei made his thoughts known during an Eye on Port panel discussion on the impact of the complete reversal of the discount policy on doing business in the country.

It will be recalled that the Government of Ghana, through the Customs Division of the Ghana Revenue Authority, in 2019 applied a 50 percent discount on duties payable on all general goods, and 30 percent discount on vehicles to encourage more importation and tax compliance as well as alleviate the economic burden on the trading and consuming public. This discount was further reduced to 30 percent and 10 percent respectively in 2021. However, beginning January 1, 2023, the discount policy has been scrapped.

Touching on the subject, a Supervisor at the Vehicle Valuation Unit at the Customs Technical Services Bureau (CTSB), Justice Yadjayime, explained that the reversal is in line with government’s economic policy which seeks to improve revenue collection in the year 2023.

The President of ACHAG opined that he would have preferred to see these discounts applied on only a selected group of products of which government hopes to encourage importation.

“We thought it would have been selected items but we realised that the 30 percent was applied on ammunitions, cigarettes, tooth pick, cotton bud, hair products, as other items we have competitive advantage in as a country.”

Mr. Yaw Kyei has anticipated that the complete reversal of the discount policy placed on imported values of general goods and vehicles at the port will increase cost of doing business, and inevitably affect the cost of consumer products on the market.

“Some of these wholesalers and retailers have the 30 percent discount absorbed within their profit base; now the reversal will cause a reduction in the profit margins and they will consider increasing the prices to recover the profits,” Mr. Kyei expressed.

He also explained that this decision also came as a result of findings indicating that though discounts were applied on duties, this did not have a positive effect on the prices of goods on the market.

The Customs official also hinted that “government also has some commitment to those who are assembling vehicles that some of these things are done so that the market will be fair”.

He added, however, that the discount policy did improve tax compliance at the ports.

President of ACHAG indicated that smuggling and under invoicing had reduced, and importers had become more willing to clear goods legitimately.