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Business News of Thursday, 31 January 2019


Free zones to pay duties on goods in FZ shops, MoF prepares to monitor implementation


The Ministry of Finance has resolved to keenly monitor implementation of a directive by the Ghana Revenue Authority to make Free Zones operators pay the required import duties on goods meant for Free zones shops.

The Ministry however said, Free zones operators will later be allowed to claim refund of such levies upon submission of appropriate returns.

This aims at helping to curb Illegal transit trade and unlawful activities in Free zones licensed operations which are said to have cost the country an estimated GHc2 billion loss of tax revenue in 2018 alone.

The loss is attributed to non-observance of rules governing transit trade and a probable conspiracy between custom officers and importers for diversion of goods officially documented as being in transit to Ghana’s land-locked neighbouring countries.

Deputy Finance Minister, Kwaku Kwarteng, who disclosed this to the Goldstreet Business, expressed worry about how non-compliance to the rules and regulations at the ports is hurting the country’s transit trade regime.

The practice of diverting imported goods designated for transit to Ghana’s neighbours into the country hurts the competitiveness of domestic trade as diverted goods sell at lower prices in the local markets since domestic duties are not paid on them.

Delivering a speech at this year’s International Customs Day in Accra, he said, “the illegal involvement of some customs officers in clearing processes at the ports is something that we cannot overlook as it also tends to compromise our transit trade.”

Instructively, government is gearing up to implement the “First Port Rule” on March 1 in collaboration with neighbouring landlocked countries to check irregularities, enhance monitoring and ensure free flow of goods at the ports and road corridors.

Ineffective tracking mechanisms have recently been blamed for the rise in diversion of transit goods, but the GRA and other stakeholders including the Ghana Shippers Authority and the Ghana Ports and Habours Authority are determined to curb the challenge.

GRA’s inability to meet its revenue target since 2016 has been a source of worry to government in recent years.

In 2017, the authority collected GHc32.4 billion as against a target of about GHc 34 billion, representing 97 percent of the target. For 2018, the GRA as at the end of August last year, had only mobilized GHc22.7 billion out of an annual target of GHc39 billion.