Opinions of Friday, 18 June 2010

Columnist: The Talk

CEPS killing Ghana

Worst Culprits in casing financial loss to the state

...As it still conducts Provisional Bill of Entry (PBE)

...Continues to do valuation of goods



After President Mills’ timely decision to discontinue with a nebulous contract between Government of Ghana and Bankswitch International Ltd, he also expanded the mandate of Ghana Community Network Services Ltd (GCNet) to deploy a valuation module in the Ghana Customs Management System (GCMS) starting from 1st June 2010.



However, investigation carried out by scouts of this paper indicates that although the GCNet system is of very high performance capacity, making the president’s decision a very wise one, there is the need to however to put the users of the service: Customs Excise and Preventive Service (CEPS) under stringent check, otherswise they would continue to cause severe revenue haemorrhage to this country.

Investigations conducted by this paper from the Takoradi Port in the Western Region over the past couple of months on the activities of the CEPS and the Destination Inspection Companies (DICs) with regards to the operation of the G-Cnet HAS exposed CEPS officials as having engaged in various corrupt practices that is making the state loose so much revenue: the type of figures Ghana government goes to look for from donors.

It is now certain and has been established beyond reasonable doubts that the annual revenue that is collected by CEPS could be increased by about 500 percent if the top hierarchy of this state organisation introduced internal checks that would flush out all corrupt officers from the service.

From our investigations, it is alleged that a cartel has been formed at the Takoradi port whose activities is to ensure that they hide under the old PNDC law 144 which gave CEPS the power to collect and account for revenue for the state to amass wealth for themselves.

The then Provisional National Defence Council (PNDC) under Flt. Lt. Jerry John Rawlings around 1987 realised government had not been realising its revenue targets and so was not able to meet the demands of the people and so it had to choose between either cutting down on expenditure or to look for innovative ways of increasing its revenue base that would not affect the already burdened people.

The government opted for the latter option and hence the choice of international trade taxation as it accounts for about 32 percent of the national revenue and CEPS were then given the mandate to collect and account for revenue on behalf of the government.

After liberalising the economy for more goods to come into the system, the government realised that goods were coming into the system yet the kind of revenue accruing as customs duties was not in tandem with the quantum of goods entering the country.

Investigations pointed to CEPS as the main problem as some of its officials were corrupt while others lacked the capacity to be in charge of Valuation, Classification and Reporting.

Several attempts made by the government to revitalised CEPS proved futile and so the alternative decision was reached by government at the time bring in the DICs to carry out the valuation and classification duties.

The CEPS Act was then amended in 1999 by Act 585 and the DICs began their work in 2000 with the mandate to do inspection inside the country to exact the duty in order to help maximise revenue for government. Before the Ghana was doing a pre-shipment inspection, but with destination inspection post shipment inspection was introduced into the custom clearing system

The following mechanisms, the Transaction Price Database (TPD), the use of an x-ray scanner as well as the Computer Risk Management System (CRMS) were introduced as part to improve on the system of revenue collection and more importantly reduce the corrupt aspect of the whole process.

From the year 2000 onwards, the G-Cnet worked hand in hand with CEPS boosting the revenue mobilisation of customs.

It is interesting to note that custom officials are by law not supposed to do valuation of goods beyond a particular weight and quantity, however it has been identified that CEPS officials even valued cargoes of rice and sugar as well as vehicles as head-loads, hiding behind the so-called PNDC law 144 to conduct Provisional Bill of Entry (PBE).

Further investigations conducted by this paper has revealed that CEPS, which feels threatened by the activities of the G-Cnet whose system picks up and reports all nefarious activities of CEPS officials. They therefore joined hands with certain media houses to wage a relentless propaganda against GCNnet and the DICs which culminated in the president’s summoning all interested parties to the castle a two Fridays ago

Some disturbing activities uncovered at the Takoradi port include the smuggling of containers with various goods as well as the practice of valuing goods under the guise of personal effect.

It must be noted that at the arrival of a container at the Takoradi port, the containers are sent to the scanner for scanning with officials of CEPS and G-Cnet monitoring on a screen in a room and when the actual or the real goods in the container are different from what has been stated on the Final Classification and Valuation Report (FCVR), the G-Cnet officials prompt CEPS officials for the necessary action to be taken.

After going through the scan, the containers are sent to the New Container Plant (NCP) where officials from CEPS, BNI, and National Security and Police personnel are present with no DIC official present. It is at this stage that valuation of goods is done by CEPS officials.

One of the rules that CEPS is alleged to be hiding under to do the manipulation is that, “if there is an under declaration, customs should instruct that the importer pays the excess. CEPS can exact from 100 to 200 percent penalty as a deterrent to others.”

It is alleged that some corrupt officials of CEPS knowing very well that the law gives them some amount of discretion strike deals with offending importers to waive the penalties for a fee.

According to some workers who spoke to this paper in separate interviews, the current system of using the G-Cnet is good except that there should be proper and effective supervision by the Ghana Revenue Authority and other stakeholders in order to maximise revenue for Ghana.



Some respondents also believe that the Ministry of Trade and Industry needs to revitalise its supervision role over the DICs. Other group of people who have been mentioned as condoning and conniving with CEPS officials to perpetuate this practice are agents and importers.



One of our sources who preferred to speak on anonymity noted, “However rotten customs is, there are genuine officials and so it is incumbent on us as a nation to put in all the necessary internal checks to make the organisation work well just as others like Ghana Ports and Harbours Authority (GPHA) are doing.”



Source: The Talk (Also published in the Daily Democrat)