Benchmark discount reversal will increase business cost – ACHAG
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.
Mr. Yaw Kyei, President of ACHAG 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 which would affect products on the market.
He observed that some of the wholesalers and retailers before the reversal had the 30 percent discount on general goods absorbed within their profit base, therefore, the reversal would cause a reduction in their profit margin which might make the consider increasing their prices to recover the profits.
He 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.
He 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 coupled with the impact of the reversal on their businesses.
Mr. Kyei suggested that the government consider applying the discounts on selected groups of products to encourage their importation into the country.
Mr. Justice Yadjayime, Supervisor at the Vehicle Valuation Unit at the Customs Technical Services Bureau (CTSB), 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 fulfill 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.