President Nana Akufo-Addo reportedly ordered the suspension of the reversal of the benchmark policy to allow for further consultations.
But, the suspension order from the President means nothing as the Exporters Association of Ghana (IEAG) has maintained that charges have already gone up at the ports with prices of imported goods also going up.
The president’s order is likely to anger people as discussions on the benchmark policy have dominated public debate since June last year, with Ghana Union of Traders Association (GUTA) and Importers and Exporters Association of Ghana (IEAG) others kicking against the removal of the benchmark values.
The Association of Ghana Industries (AGI) has been advocating for the removal of the values saying it will ensure industrial growth.
The National Communications Officer of the main opposition National Democratic Congress (NDC), Sammy Gyamfi, has congratulated the Ghana Union of Traders Association (GUTA) and the other trade unions that kicked against the reversal of the benchmark policy.
Commenting on this, Sammy Gyamfi who had earlier held a press conference to oppose the reversal said “This is VICTORY for the Ghanaian people. Kudos to GUTA, the Importers and Exporters Association of Ghana and all those who stood against the callous decision by the government to reverse benchmark value discounts on imports.”
The president’s order comes after the Finance Ministry had agreed to further engagement on the discounted benchmark reversal after a crucial meeting with other stakeholders.
The meeting on Thursday January 6 was attended by the Finance Minister Ken Ofori Atta, trade union leaders, Customs and the Ghana Revenue Authority (GRA) to conclude on what was termed” satisfactory values for importation”.
The reversal was to affect 143 items under three categories prescribed by the Ghana Revenue Authority.
The benchmark value, which is the amount taxable on imports, was reduced by 50 percent for some goods. The government had hoped that this was going to scale up the volume of transactions to make Ghana’s ports competitive.
The government decided to reverse this decision after it met opposition from the Association of Ghana Industries and the Ghana Union of Traders Association (GUTA).
But it met opposition from trade unions including the Ghana Union of Traders Association (GUTA) and Importers and Exporters Association of Ghana (IEAG).
The Executive Secretary of the IEAG, Sampson Asaki Awingobit, served notice to sue the government over the reversal.
He told 3FM’s Napo Ali Fuseini in an interview on Wednesday January 5 that the reversal smacks of illegality for which he is calling on the GRA to stop.
“This benchmark value issue has to be dealt with legal way because. This benchmark value issue is illegal on its own. You cannot say you have created a data trade price somewhere that nobody knows how and manner you are getting the price data,” he said.
The IEAG said this decision would be detrimental to the business community if it is not stopped immediately.
According to the IEAG, it would also lead to many businesses losing their cargoes since importers would have to pay more outside their budgets even at this crucial time at the beginning of a new year.
A statement signed by their Executive Secretary Sampson Asaki Awingobit said on Tuesday January 4 that ” the position taken by the government and by extension the Ghana Revenue Authority GRA on this matter would be detrimental to the business community if it is not reversed immediately.
“It would lead to many businesses losing their cargoes since importers would have to pay more outside their budgets even at this crucial time at the beginning of a new year. In the very likely event that such importers are not able to raise the additional funds to clear their goods on time, issues of uncleared cargo lists UCL would pop up and huge loses to demurrage would set in.
“Therefore, the IEAG is calling on the government and for that matter the GRA to withdraw this directive with immediate effect. The IEAG demands that such importers be given at least 14 working days to clear their already cleared cargoes from the port without the new 50% benchmark values.”
Mr Awingobit further revealed that he would sue the the government if it doesn’t alt the reversal.
Sammy Gyamfi had earlier said at his press conference that the decision by the government through the Ghana Revenue Authority (GRA) to reverse the benchmark value was a terrible decision that came at a time when the cedi was depreciating and world commodity prices are increasing at an alarming rate, with freight charges and port handling charges being extremely high.
He said more importantly, “the callous decision by government to reverse benchmark value discounts comes at a time Ghanaian businesses, startups, parents and households are reeling under a yoke of excessive taxation, persistent increases in fuel prices and high cost of living never before witnessed in the annals of our country.”
Sammy further said “what the decision to reverse benchmark value discounts effectively means is that, prices of the affected items such as; vehicles and spare parts, machinery, equipment and plants, aluminum finished products (roofing sheets), portland cement, cement paper bags, and clinker, poultry, animal products (meat), fish, rice, sugar, pasta, spaghetti, noodles and macaroni, pharmaceuticals (including drugs such as paracetamol, condoms etc.), toilet paper, facial tissue and towel, chocolate, toffees and chewing gum, palm oil (crude and refined oils), mosquito coils, ceramic tiles, tile cement, machetes, plastics, textile and textile articles, fruit juices, tomato paste and ketchup, furniture and parts, boxes of paper and paperboard cases of corrugated paper, iron steel bars, toilet soap and laundry bar soap, detergents washing powder, lubricating oil, soft drinks and carbonated drinks, biscuits/wafers, among others; will all go up by 30%- 50% in the coming days.
“These increases which will eventually be passed on to Ghanaians will further escalate prices of general goods and services in the country and exacerbate the severe hardships Ghanaians are already reeling under. This will ultimately increase the cost of doing business in the country, negatively affect turnover of businesses and the volume of trade in the country, and lead to the
collapse of many businesses and jobs.
“In fact, the bitter reality is that, given the many draconian taxes that have been introduced by the callous Akufo-Addo/Bawumia/NPP government since April 2019 and the continuous depreciation of the Ghana Cedi which is already eroding profit margins and the capital of businesses, importers and Ghanaians in general will be worse off as a result of this decision. In short, import duties will be far higher than they were before April 2019 when the benchmark value discounts were introduced, in view of the continuous free fall of the Cedi and the raft of new crippling tax measures that the government has introduced since April 2019.”