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Business News of Friday, 23 May 2008

Source: GNA

Rice importing companies can't re-export

Accra, May 23, GNA- Dr. Anthony Akoto Osei, Deputy Minister of Finance, has said rice importing companies would not be allowed to re-export as the Customs and Excise (Petroleum Taxes and Petroleum Related Levies) Amendment Bill became operational.

In a closing remark before Parliament passed the Bill under a certificate of urgency on Friday, Dr. Osei said the Bill was rather to encourage the local production of rice even if in the near future. The object of the Bill is to ameliorate effects of rising global commodity prices and its effects on the economy by removing the import duty on rice, wheat, vegetable oil, and yellow maize for poultry. Finance Committee of Parliament has been informed that this year alone, the price of rice has risen by 70 per cent, and passage of the Bill is to ensure that the prices of the selected products do not rise as fast as they are currently.

The Bill also seeks to reduce the petroleum price per litre of gas oil, kerosene, marine gas oil.

It waives 6.2 pesewas on each litre of gas oil; 4.5 pesewas on kerosene and 3.9 on marine gas oil.

The introduction of the Bill followed a nationwide broadcast on Thursday by President John Agyekum Kufuor on Government measures to mitigate economic hardships as result of high petroleum prices and increasing food prices.

A Finance Committee Report on the Bill noted speculations as to the direction of prices after the President's delivery, which could lead to chaos in the market, thus creating the need for Parliament to quickly consider the Bill.

The mitigation measures are to cause the Government a revenue loss of GH¢ 38 million, but the Committee said Government is reviewing and reprioritizing the budget of Government Ministries Departments and Agencies, especially in their development expenditure. The Report also stated that Government had made available GH¢ 11 million subsidy for the agricultural sector. Dr Osei said the Government had been in touch with major importers of rice, monitoring the market and anticipated the shortage, adding that people had rather been over-valuing their rice purchases He announced that a task force had been charged to continue monitoring the situation.

The House learned from the Majority side tahat the Aveyime Rice project had been re-launched to boost the local production of rice part of measures to boost local food production Mr Edward Doe Adjaho, Deputy Minority Leader, supported the motion on the Bill, but however described it as ad hoc and panicky by the ruling New Patriotic Party (NPP).

He said the House was not being told what projects were to be affected; adding that the House should know what aspect of the national budgets it was cutting.

"I reluctantly support the Bill," Mr Adjaho said. The debate was characterised by a comparison of achievements of what the ruling NPP had done to mitigate poverty levels and what the National Democratic Congress (NDC) did to mitigate economic hardships when it was in power.

Contributors from the NDC were of the view that reducing import duties on food staples would not necessarily reduce their prices.