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Akufo-Addo buckles under pressure, suspends removal of discounts on benchmark values

President  Nana Akufo-Addo has finally buckled and ordered a suspension of his government’s planned removal of discounts applied on benchmark values of imported goods in 2019, 50% on selected goods and 30% on vehicles.

Pro-government radio station Asaase Radio reports on its website on Saturday evening that the President issued the suspension order to the Customs Division of the Ghana Revenue Authority (GRA).

Government has not been able to implement the policy decision to withdraw the discounts and has been compelled to shift the implementation date from November 2021, shifting the date again this week to January 17, 2022 after an initial announcement that the new values will be effective January 4, 2022.

Asaare Radio says sources familiar with the President’s directive indicate that the President has asked for the policy to be delayed for wider consultations and ensure that the complaints of the traders opposed to the reversal can be “sufficiently considered before a decision on implementation and its timing is finally taken.”

According to the radio station, its sources have further indicated “that the consultation has began and the expectation is that by 17 January, a greater understanding of the impact and essence of the policy would have been achieved among stakeholders.”

GRA statements
GRA in a statement dated the 2nd of January 2022 and signed by Florence Asante (Mrs), Assistant Commissioner, for Communication & Public Affairs, indicated that Effective Tuesday, 4th January, 2022, the Customs Division of the Ghana Revenue Authority (GRA) will begin the implementation of the reversal, which will affect all three categories of items on which the reversal was applied, namely, the home delivery value of vehicle, goods on which benchmark values are applied and all other goods.

The GRA again in a statement dated the 7th of January 2022, postponed the implementation of the reversal to the 17th of January 2022, to allow a storage-free period for vessels that discharged on 31st December 2021 to go through clearance without being affected by the reversal of the policy.

According to the release, effective Monday, 17 January 2022, any Bill of Entry (BOE) presented without payment of duty and other taxes or deposit of security (where it is a suspense cargo) will be affected by the policy. A bill of entry according to the release shall require reprocessing to be affected by the new policy.

Government in 2019 introduced the benchmark policy in accordance with the World Customs Organisation’s policy of regular review of valuation database. Under this policy, certain commodities are benchmarked to the prevailing world prices as a risk management tool, to reflect the true market dynamics of these commodities.

The 2019 government policy also took into consideration factors such as protection of health, the environment, and security as well as protection of local industries.

In line with the reversal, series of engagements have been had with relevant stakeholders with the aim of reaching a consensus on the implementation of the policy. In all forty-three (43) items on the list were expected to be affected by the review.

Opposing views
Business groups in the country kicked against the recent decision by government to suspend the 50% benchmark values on selected goods and the 30% on vehicles.

Their opposition to the policy followed a 25th November 2021 crunch meeting by the Ghana Union of Traders Association (GUTA) comprising 68 trader associations and other business groups. In a statement issued by GUTA on behalf of the business groups ahead of their 25th November meeting, GUTA said the conditions that necessitated the introduction of the policy has been worsened following the outbreak of the COVID-19 pandemic.

GUTA said, “The policy of reducing the benchmark values did not come out of the blue. It was introduced in 2019 to save businesses in the country from total collapse, as a result of the very high import duties, other numerous taxes, high fees and charges on imports ranging between 55% to 65%, draining our capital.”

“This unbearable situation led to outcry and serious agitation by members of the business community, especially importers and call for a drastic reduction of cost of doing business in the country.”

“In view of the aforesaid, we are stating without any equivocation that we shall not accept the reversal of the benchmark value reduction policy, which we hope the government will, with all due respect, listen to our voice and avert any rift and unrest in the country” the GUTA statement said.

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