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Business News of Thursday, 29 July 2021

Source: thebftonline.com

GRA, NIC to phase out old insurance billing system at ports

File photo Tema port’s MPS Terminal 3 File photo Tema port’s MPS Terminal 3

The Ghana Revenue Authority (GRA) and National Insurance Commission (NIC) will from next year roll-out a system that ensures importers are paying fair insurance on their goods brought into the country; thereby ending the age-old flat rate system which sometimes slaps higher charges on them.

Currently, importers are charged a generic 0.875 percent as insurance on the value of their goods brought into the country; a practice the NIC says has a dual negative effect, as it contributes to loss in revenue to the state and overcharging of importers.

In an interview with the B&FT, Head of Supervision at the National Insurance Commission (NIC), Seth Eshun, explained how the new system is going to work.

“Currently, if you bring your goods and you do not have insurance, the Ghana Revenue Authority assumes an insurance rate (0.875 percent) for you, and that is what grosses-up the total value that the GRA charges their tax on.

“The rate it uses may be higher than the actual rate of insurance on the goods; if we implement the system and ensure that everyone is buying the right insurance locally, it will result in the GRA using the right rate – and in some cases it will be lower and the tax that importers pay presently.”

Mr. Eshun further assured that frantic efforts are being made to roll-out the new system by next year.

“We have chosen the vendor who will develop the software for the system. All the imports which require marine insurance go through the Ghana Revenue Authority. Once we have the system running, we will increase insurance coverage as well.

“We are planning to get the software done by end of the year, and then it will go through testing. Because it will be an international platform as well, we are ensuring that all cybersecurity boxes are ticked.

“There are some of stakeholders who have reservations and we are working seriously with them; we are sitting down and explaining to them what the system is really about and how it will benefit the sector,” he said.

The Ghana Revenue Authority, on its part, believes the protocol has come at an opportune time as the outfit is embarking on aggressive revenue mobilisation.

It is expected that the execution of this programme will complement implementation of the Insurance Act to offer a major boost for insurance penetration and revenue mobilisation efforts.

The Ghana Shippers Authority also says successful implementation of the system will play an important role in overseas trade and commerce.