Benchmark discount reversal will increase business cost – Customs House Agents Association
The Association of Customs House Agents, Ghana (ACHAG) has indicated that the implementation of the complete reversal of the discounts on benchmark values for imported goods and vehicles will lead to increases in business costs.
The President of ACHAG, Mr. Yaw Kyei, speaking at a Ghana Ports and Harbours Authority (GPHA) media forum to assess the impact of the reversal, which took effect from January 01, 2023, predicted that importers would have to pay more duties leading to increases in the cost of doing business.
Mr. Kyei added that such costs would inevitably be passed on to the consumers and that would affect products on the market.
He observed that some of the wholesalers and retailers before the reversal had a 30% discount on general goods absorbed within their profit base.
He explained that the reversal would cause a reduction in their profit margin which might make the consider increasing their prices to recover the profits.
Mr. Kyei indicated that the discount led to a reduction in smuggling and under invoicing adding that importers also became more willing to clear their goods legitimately.
This comes after the Ghana Revenue Authority (GRA) in December 2022 announced a complete reversal of the discount on the Free on Board (FOB) value of general goods and Home Delivery Value (HDV) on vehicles from January 1, 2023.
This means importers will not enjoy any more 10% discount on vehicles and a 30% discount on all other goods from 2023.
According to the GRA, the move is in line with the 2023 Budget and Economic Policy through which the government intends using to accrue more revenue for the State.
Meanwhile, Mr Kyei disclosed that most importers hurried to pay their duties ahead of the January 01, implementation of the reversal to avoid paying more duties on their goods.
The ACHAG President also stated that importers were unhappy about the reversal, especially with the volatility of the exchange rate which was negatively affecting trade.
Mr. Kyei suggested that the government consider applying discounts on selected groups of products to encourage their importation into the country.
But, the Supervisor at the Vehicle Valuation Unit at the Customs Technical Services Bureau (CTSB), Mr. Justice Yadjayime, on his part explained that the reversal was in line with the government’s economic policy aimed at improving revenue collection this year.
Mr. Yadjayime said the reversal was based on findings that the discount did not have any positive impact on the prices of goods on the market.
He said it was also to enable the government to fulfil its commitments to those who assemble vehicles in Ghana to make the market fair.
The Customs Supervisor added however that the discount policy helped to improve tax compliance at the ports, acknowledging that a lot of people reported vehicles they have bought illegally and tried to pay the needed tax on them.
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