Let’s Streamline The Import VAT And Excise Duty: To Build Our Crumbling Infrastructure.
THE GHANA’S IRRATIONAL IMPORT TAX SYSTEM is out of joint and needs a tune-up, ASAP!
Quick, let’s try to explicate the geometry of our import tax code: Import tax, VAT, Ecowas levy, EDIF, Exam fees, processing fees and NHIL fees. Not to mention the Agents’ fees and other covert fees. For example, all that could hit you with an import duty of GHs 4,828 .00 for a 2001- Toyota Corolla sedan for which you probably paid $1000.00 at the Auto Auction.
Yep, those are the taxes and fees you’ll be required to pay just to clear your car from the harbor. Are you confused yet? Please don’t ask me why it’s so complicated. Even Sierra Leone has a better and more equitable system than ours. Why is that?
There are so many things in Ghana that really make people vex. Add the atrocious import –taxes on cars and personal effects we pay at our Ports and harbors to the list. People can not take it anymore when it comes to Ghana’s inequity import duties.
Almost like everything else in Ghana’s economy, the import duty code system is nothing to write home about. It’s a mess and out of joint. Import duties are taking a financial toll on all of us and paralyzing our ability to invest in Ghana.
So what is the fair import duty should Ghanaians pay, without robbing the bank? This is one of Ghana’s most debated and compelling questions. It’s often a riddle that remains unanswered.
Ghana needs revenue but read no further if you think our import duty is fair to Ghanaian immigrants in the Diaspora, who ship vehicles and personal effects to Ghana for personal use.
Quick thought, can you point to a politician who pays the same import duty as the rest of us pay? Why the disparity? Raising money supposedly, to fix our crumbling infrastructure requires sacrifices from everyone, including our politicians. But that is not the case. If you don’t believe me look around and see how often they change cars.
First of all for an equitable import duty system, we have to get rid of the ‘Kalabule and cockamamie Agents,’ and streamline cumbersome procedures and exorbitant handling charges at our Ports and Harbors.
Spare me. The country’s import VAT and Excise duty are in a mess. There seems to be no shortage of efforts by the government, politicians and policy makers to tax Ghanaians (especially those in the Diaspora) to death. So Ghana Ports and Harbors Authority and its layers of “Clearing Agents” have earned Ghanaians’ ire—big time!
Ghana’s cutthroat, dog-eat-dog Import and Excise duty system has for decades earned the ire of the Ghanaians in the Diaspora. Suddenly it has found itself on the front pages of the national newspapers and online blogosphere. It’s likely going to be a hot topic in the next election campaigns, for the candidates who will seriously want the money and attention of Ghanaians in the Diaspora.
Let us get one thing straight: Import duty and Excise Taxes on vehicles in the former war torn neighboring countries are much, much lower and more reasonable than Ghana’s. The question then is: Why have we been forced to pay more duties than them, when they seem to need more money than us, given their socio-economic conditions after their civil wars?
The election season is around the corner; therefore it’s time for the politicians to start talking about real issues like the atrocious import duty on cars and personal effects.
I think I have done my country a favor by forcing this unpopular topic to the top of the political agenda in the next election season and perhaps crashing it through the barriers of the political corridors next year.
For some reasons most present and former politicians and policy makers have had a difficult time coming to terms with this thousand pound gorilla, which is robbing Peter to pay Paul—I wonder why government after government seems to ignore the need to address this problem. So it’s my hope that it gains attention and traction in the next year’s political campaigns.
The world economy is struggling. Every where you turn everyone is struggling and suffering economically. No country or person is going to emerge unscathed from the global economic downturn. For years concerns have been raised by Ghanaians at home and abroad about the government’s take-no-prisoners approach to import duties which is having a choke-hold on the economy. They have been disrespectfully ignored. Ghanaian policy makers and politicians do not see the need to overhaul the unfriendly import and Excise duties which are killing the economy and preventing entrepreneurship to flourish.
For there to be employment in Ghana some people (especially, those who can afford to import machinery and tools) will have to create businesses that grow and add value to the local economy. If those businesses grow enough, the employees and customers will be satisfied .The country will collect taxes and everyone will be happy. That is if we don’t want to be a consumption nation.
Whoever said that the well- off Ghanaians, especially those in the Diaspora live large when they go home to Ghana was wrong—just check out the their headaches and heartaches. Thanks in part to our out- of – control import and excise tax system (and the kalabule “clearing Agents at our Ports and harbors)which serves the interests of some of our politicians ,policy makers and CEPS officers .They don’t want to touch it with a ten-foot pole because they get dividend from it.
Besides being the frontline recipients of the armed robbers’ vengeances, family’s ATM machines, funeral sponsors and victims of socio-economic exploitation, Ghanaian immigrants in the Diaspora are paying cutthroat import and excise taxes on their vehicles and personal effects.
First of all, before any meaningful change can be made to institute an equitable import tax system comparable to our neighbors’, there is a need to get rid of the so-called clearing Agents—who have congregated around the Port and harbor areas in the country and made a cottage industry out of innocent Ghanaians ,by duping or dumping unrealistic charges on their victims(Importers).
Yep, no need for tears for these crooks who act like vultures. But for an effective system to work in Ghana we should get rid of the “Clearing Agents” ASAP! Let the Custom officials do what they were employed to do—by duping us nakedly.
By the way, what do we do with the revenue from the import duties when our roads, bridges, hospitals and schools are ailing beyond repair?
Yes, I know, the government is on a quest to raise money from the import taxes so lowering the cost of duty on cars and personal effects is not a priority. Don’t fix it if it ain’t broke!
Unfortunately, whatever the reasons—yes, I’m aware there are political, personal and economic constraints—people are going to find a way around any plan to fix the import taxes problem. We’re talking about a system which is troubled by budget scandals, political infighting and most recently politicians seizing up people’s imported cars for their personal use or sell them without remorse.
While Ghana is taxing and “VATing” its citizens to death, our neighbor, Togo, is welcoming importers with open arms and laughing all the way to the bank.
The president, Prof Mills, should create a legacy by forming a competitive import tax zone for Ghana. This is not only for its citizens who bring home their belongings and investors’ machinery. It‘s to create an industry and encourage other African citizens to utilize our Port and harbor services. It appears the idea behind taxes in Ghana is that any import is a luxury item and anybody bringing it in is rich and therefore the exorbitant levies.
The high tariffs being imposed on imports force people to cut corners by resorting to ‘cockamamie’ clearing agents. Our current tax policy seems to reward unscrupulous importers, traders and their collaborative corrupt CEPS officials and agents because if one has to pay so much duty or excise to government, then paying bribe to the BIG officers becomes an attractive option, despite any penalty of tax evasion that could arise when arrested.
Fact: We have no manufacturing companies, so we cannot claim we are trying to use higher tariffs to protect their products against imported ones. Neither are we attempting to stop certain imports on health and safety grounds. So it’s almost all about tax revenue, revenue and more revenue. Taxes must be levied fairly on all Ghanaians, and not disproportionate on the few who have brought items from abroad, especially for personal usage. We should realize that the higher tariff has an effect on essential items like car or television for the hard working poor nurse in Ghana.
For a start we should adapt the U.S. system. In America, once you import an item, Custom officers inspect your goods as they arrive and determine the appropriate duty you must pay. Then you pay by check, credit card or money order (no cash please!). You will be issued a receipt for the payment, which is used to clear the goods from the harbor. This process takes less than 1-3 hours, depending on the size of the goods, the day of the week and the time one goes there. The good part is that, you don’t need an army of clearing agents to clear one car or a container of goods.
Do I think something is going to be done about this issue by our policy makers? Hell no, I’m not that naïve!! We’re talking about a system that allows some individuals with power to confiscate some poor souls’ vehicles and sale them to themselves with impunity. But, it doesn’t hurt to raise the issue at this hard economic time, when every nation is at least trying to repair the damage the old policies have caused and design a new economic order that will prepare them to take off for the new horizon. Is Ghana ready? I will not count on it.
Why bother when we’re aggressively developing a megawatt appetite for oil money which is not yet in the bank! Folks, are you proud now? Tax and VAT us to the bone while our national infrastructure is collapsing. The next generation will thank us for ruining everything for them.
I think it’s better for the government to stop treating Ghanaians living aboard as pariahs who are responsible for all Ghana’s problems—-including fixing its leaking financial faucet and the runaway appetite for waste and corruption.
Kwaku Adu-Gyamfi (Voice Of Reason)
*The author is a social commentator and the Founder of the Adu-Gyamfi Disadvantaged Youth Empowerment and Educational Foundation of Asuom, Akim.