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Business News of Wednesday, 5 January 2022

Source: classfmonline.com

Benchmark value scrap: 'Hold on' - GUTA tells government

GUTA President Dr Joseph Obeng GUTA President Dr Joseph Obeng

The Ghana Union of Traders Associations (GUTA) has called on the government to hold on with the implementation of the reversal of the 50 per cent benchmark value on imports, which is expected to take effect from today, Tuesday, 4 January 2022.

The association wants the government to hold on to the implementation pending “proper stakeholder” engagements.

According to the association, times are hard as a result of the COVID-19 pandemic, especially, as it is still prevalent.

“World commodity prices are still high and going up, with freight charges being extremely high”, GUTA noted, adding that “the conditions that resulted [in] the introduction of the benchmark value policy are still prevalent and even worse.

The association also said the prices of “essential commodities such as food, pharmaceuticals and others will be extremely unbearable for the consuming public, which will also affect turnover and volume of trade in the country, thereby collapse businesses”.

“In the fight against the pandemic, prices of food items, pharmaceutical products etc., need to be affordable to the consuming public”, GUTA said.

“Our local manufacturers cannot meet the demand of most of the listed items, therefore, we are not self-sufficient as a country, to surcharge the consuming public”, it said.

The group also noted that the “lack of competitiveness of our local industries is based on other factors rather than the benchmark value policy of which they (industries) are also beneficiaries.”

It continued: “The exchange rate is also going up at this time” while “the competitiveness of the Ghanaian trader within the sub-regional bloc” and cross-border trade “should also be conceded as very necessary and important.”

GUTA referred the government to its earlier promise to engage stakeholders through the Economic Management Team on the issue before any decision is taken, emphasising that the engagement is yet to take place.

The association further made reference to the press conference by Finance Minister Ken Ofori-Atta, at which “he acknowledged the fact that the reversal of the benchmark value would have an adverse effect on importers and that the government would find a mitigating factor to cushion the effect but this has not yet been done.”

The Customs Division of the Ghana Revenue Authority (GRA), effective today, will begin the implementation of the reversal of the 50 per cent benchmark value on imports.

It will affect 43 selected items from some three categories, including “home delivery value vehicles, goods on which benchmark values are applied and other goods.”

A statement issued by the GRA on Sunday, 2 January 2022, entreated “the trading community, especially importers, to take note of this directive and comply accordingly.”

In 2019, in accordance with the World Customs Organisation’s policy of regular review of valuation database, the government introduced the benchmark policy.

Certain commodities are benchmarked to the prevailing world prices as a risk management tool, to reflect the true market dynamics of these commodities under this policy.

It also takes into consideration factors such as the protection of health, the environment, and security as well as the protection of local industries.

The benchmark value is the amount taxable on imports.