Revenue target from partial import discount reversal revised to GH¢2.5bn
THE government has cut its revenue target from the partial reversal of the reduction in the benchmark values (discount policy) to GH¢2.5 billion from the initial estimated GH¢3 billion.
The revised target followed delays in the review of the discount policy occasioned by some initial disagreements between the Association of Ghana Industries (AGI) and the Ghana Union of Traders Association (GUTA) over the implementation of the policy.
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While the AGI has called for a total review of the policy because it is rendering its members (manufacturers) uncompetitive, the GUTA has said the discount serves as a lifeline to the survival of traders and needs to be maintained after two months of engagements.
The Commissioner of the Customs Division of the Ghana Revenue Authority (GRA), Col Kwadwo Damoah (retd), said to resolve the disagreement, the government decided to phase out the discount policy gradually after engaging with stakeholders in the trading and manufacturing industry.
He made this known in an interview shortly after a sensitisation workshop organised by the AGI and the Ghana Revenue Authority (GRA) in Accra on May 6.
He said the first phase which was announced in the 2022 budget saw a review of the policy from 50 per cent to 30 per cent for general goods and 30 per cent to 10 per cent for vehicles.
Col Damoah said the second phase of the discount reversals would be made in the 2023 budget, of which engagement regarding its preparation had already started.
“If we had implemented the reviewed policy at the beginning of the year, we would have hoped to gain about GH¢3 billion but we started from March, hence the slight review of the target,” he said.
The benchmark values
The benchmark value is the reference value for assessing whether a particular declared value that deviated from the benchmark presented a valuation risk under-invoicing, over-invoicing and transfer pricing.
So benchmarking is essentially an internal risk assessment tool to establish whether a value can be accepted under transaction value or rejected, based on tenets of World Trade Organisation (WTO) agreement on customs valuation.
It is among other things to stamp out rampant mis-invoicing and valuation fraud and also to ensure that the value of imported goods reflects commercial prices and reality.
The government in its quest to boost the volume of imports through the country's ports reduced the benchmark values up to 50 per cent in April 2019.
Review
Col Damoah said after more than two and a half years of operation, the discount policy on imports introduced as a stop-gap measure needed to be reviewed to make it more efficient and targeted.
He said the review would align the policy with current development needs to protect the environment, local industry, strengthen public safety and support public health.
GRA committed
He said the Secretariat of the African Continental Free Trade Area (AfCFTA) had been sited in Ghana and the expectation was that the country needed to take maximum advantage of the location.
“If we are going to trade among ourselves and we don’t deepen our local manufacturing base, we will not be able to export more than we import as a country, so our market will be flooded with goods from different jurisdictions,” he said.
He, therefore, expressed the commitment of the GRA to support local industries to grow and be competitive.
“It is only when businesses are growing and expanding that we can talk about real development,” he added.
Support manufacturers
The CEO of the Association of Ghana Industries (AGI), Seth Twum Akwaboah noted that as much as the association wanted total removal of the reductions in the benchmark values on imports, “we also need a discount on importation of raw materials for local manufacturing.”
That, he said, would be able to bridge the gap between the selling prices of imported goods and those locally manufactured, so that the advantages importers are enjoying will be eliminated or reduced to the barest minimum to make it more competitive for the local producers.”
E-levy
A member of the technical committee on the electronic transaction levy, Thomas Agorsu, said the levy was instituted to widen the tax net, with hopes of increasing tax-to-GDP ratio from 12.5 to 20 per cent by 2024.
Revenue from the levy, he said, would be used to support youth employment, entrepreneurship, provide digital infrastructure and cyber-security as well as provide road infrastructure.
The levy, he said, taxed only electronic transfers and did not tax deposits or withdrawals.
“Exemptions from the levy include cumulative transfers below GH¢100 in a day, transfers between accounts held by the same person and payments of taxes and fees on the Ghana.gov platform or other government designated payment platforms,” Mr Agorsu explained.