Some of the country’s import duty rates for primary products and food items are set to go up when the new harmonised customs tariffs come into force sometime next year.
Products such as frozen chicken, cotton, yarn, woven fabric of cotton, mineral water, onion, soap, and cooking oil will now attract higher import duties from 20 per cent to 35 per cent.
According to customs, trade facilitation and industry experts, the increase in rates could bring good news to the country’s industries since they will be protected against cheap imports when those products can all be produced locally.
The provision will become operational after Ghana ratifies the ECOWAS Common External Tariffs (CET), which has created a fifth band of rates for what it describes as special goods for economic development.
The tariff band
The band, which will attract 35 per cent, will affect 130 consumption goods, mostly food items which Ghana presently taxes at 20 per cent. They will include groundnut oil, palm oil, coconut and cotton-seed oil.
Equally, certain meat products, which were hitherto taxed at 20 per cent, will now attract 35 per cent to ensure coherence with other meat products.
But the Minister of Finance, Mr Seth Terkper, told a section of the media in Accra on November 28 that Ghana would risk meeting the January 2015 deadline for the implementation of the harmonised tariffs regime. ECOWAS adopted the process in 2006.
He explained that the Ghana case required Parliamentary approval which was still on going, explaining that the revised Customs laws to be passed by Parliament later next year already contained provisions of the new CET tariffs.
The CET is common external tariff regime means that the same tariff will be slapped on an eligible item imported into the ECOWAS sub-region, irrespective of which ECOWAS-member country it lands in.
It is a vehicle to create a Customs union as a complementary condition for the creation of a common market for West Africa. ECOWAS has currently implemented the Trade Liberalisation Scheme (ETLS) with some notable successes.
Mr Terkper, who chaired ECOWAS meeting for Finance Ministers and Director-Generals of Customs bodies in the sub-region, urged commitment on the part of all ECOWAS member states to the implementation process to cement the successes of the long journey.
The impact
Ghana currently has 6,057 commodity lines which will reduce to 5,889 when ECOWAS CET comes into force.
However, the common tariffs will reduce the country’s list of commodities under the zero per cent band from the present 725 to 85; while those admitted under the five per cent band will now be broadened from 375 to 2,146 under the CET.
“This signifies a big boost to local industries as these items are mainly basic raw materials that are currently taxed at 10??,” A Director, Multilateral, Regional and Bilateral Unit of the Ministry of Finance, Mr Nyame Baafi, said in Accra at a stakeholder sensitisation workshop for the media to deepen the regional integration.
Mr Hendrick Dwommoh-Mensah also of MoF, who presented findings of an impact assessment, said there were various sectors of the economy which would benefit from increased revenue under the new system, by about 1.4 per cent more of the total value of commodity imports in 2013.
Based on GH¢48.99 billion total imports assumed for 2015, the country would gain an estimated GH¢686 million up by about three per cent.
“Additionally, the CET will remove all exemptions and concessions under chapter 98 of the Harmonised Coding System. This will improve customs revenue by GH₵300 million,” he said, and added that the total revenue gain from the implementation of CET in 2015 would be an estimated GH¢986 million.
GRAPHIC BUSINESS