Govt will no longer absorb CTN cost; Measures in place to mitigate burden on shippers

BY: Maclean Kwofi
Mr Isaac Crentsil, Commissioner of Customs
Mr Isaac Crentsil, Commissioner of Customs

The government will not be able to absorb the cost of the cargo tracking note (CTN) when the implementation of the module starts on October 15, 2018.

This, however, means that shippers or importers are now to pay for fees or charges applicable to the CTN module contrary to an initial pledge by the government to absorb the cost.

To mitigate the burden on shippers, information available to the GRAPHIC BUSINESS indicates that the government intends to introduce a scheme under the CTN where an importer that ships not more than three 20-foot equivalent unit (TEU) into the country in a month would be exempted from paying any charges in relation to the CTN.

As a result, a report on the fallout of the stakeholder consultations on the CTN has been forwarded to the Presidency as of October 1, 2018 for the green light ahead of the implementation date.

When contacted, the Chief Revenue Officer in charge of Communications and Public Affairs of the Customs Division of the GRA, Mr Johnson Yankey, confirmed the development but said that there would be an official statement from the GRA explaining details about the new trend.

Since the CTN is mainly introduced to help resolve huge trade malpractices that were orchestrated by government agencies and big firms during the clearing of goods at the country’s ports, the Revenue Officer said the three-TEU per month move would help lessen the burden on smaller importers.

Data sourced from the CTN platform during the piloting of the module showed that the country lost close to US$14.04 million in revenue in July 2018 alone.

The losses were attributed to trade malpractices that were orchestrated by government agencies and big firms during the clearing of goods at the country’s ports.

With these shocking figures, he stated that the government was determined to go ahead with the implementation come October 15 as the country stood to gain tremendously from the CTN module if implemented.

Comprehensive consultations

Asked about the readiness of the GRA, Mr Yankey said all was set for the implementation of the module to start in the next six days.
“We have done a comprehensive five-week stakeholder consultations with the trading community across the country and we are set to roll out the initiative,” he said.

He explained that the CTN was expected to enhance the security functions of government, generate real time information and statistics, revenue collection and trade facilitation on the global scene.

It is also a way of verifying the contents of every cargo and then tracking that cargo between ports. Every cargo travelling by sea must be issued with a CTN by an approved agent prior to departure.

CTN postponement

The full implementation of the CTN module was rescheduled from September 1 to October 15 this year. The postponement was as a result of agitations from the Ghana Union of Traders Association (GUTA) and the Ship Owners and Agents Association of Ghana (SOAAG) against the system.

The trading community had explained that the CTN, if allowed to take effect, would increase cost of clearing, delay the turnaround time and infringe on aspects of the World Trade Organisation’s Trade Facilitation Agreement (TFA).

As a result, it asked the Customs Division of the GRA to use the Customs to Customs (C2C) method recommended by the TFA to achieve the same results that the CTN is envisaged to achieve.

Petition in opposition

But this development has started resurrecting the issues involved in an initiative which became shrouded in controversy and, therefore, became moribund as soon as it was mooted earlier this year.

Even before the Presidency would make a pronouncement on the way forward, importers, led by a Joint Business Consultative Forum (JBCF), have registered their opposition against the proposed implementation of the module and the report forwarded to the Presidency.

In a petition, seen by the paper, the forum accused the Commissioner of Customs Division of Ghana Revenue Authority (GRA), Mr Isaac Crentsil, for showing bad faith by charging his men on a supposed CTN implementation contrary to an earlier agreement which states otherwise.

That, according to the forum, leaves it with no option than to sensitise its support base calling for information as a result of the Commissioner's order being carried out at all the frontiers.

“We appeal to the President to consider the difficulties and confusion that the implementation of the CTN will bring to bear on the business community,” the petition stated.

It explained that the CTN module could not ensure universality, that is if it does not cover goods shipped by air, cargo through the land, vehicles and earth moving and other such machineries, wherein lies its claims when these items cover a substantial part of imports.

Do not impose it

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The JBCF said the CTN as a module could never be implemented at the country’s borders where goods were not packed in containers but were carried by vehicles and most of the time by head potters without manifest or bill of laden.

“The CTN by this is, therefore, targeted at a section of the importing community who uses the mainstream sea ports and this is definitely not fair-trade.

“We are very much aware also in this regard that over 50 per cent of imported goods into the country are exempted from the payment of duties and taxes.

We are by this making it clear that there is no fairness with the whole tax system, since it is only the few compliant ones that are shouldering the tax burden.

“We in the business community hereby state that such a porous system should not be imposed and, therefore, advise the government not to consider its implementation,” the petition said. — GB