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Opinions of Wednesday, 14 June 2017

Columnist: Cassiel Ato Forson

Cassiel Ato Forson writes: Another 419 economic policy on spare parts

Parliament has passed the Customs Amendment Bill 2017 into law subject to Presidential assent. Surprisingly, the object of the bill is to provide for a zero-rate of duties on SELECTED vehicular spare parts only.
Selected Spare parts:

It is interesting to note that the budget statement on page 136 paragraph 796 under tax incentives, the government proposed to abolish ALL duties on the importation of spare parts.

The government never said they were going to abolish duties on only selected vehicular spare parts.

It is, however, deceptive for a government that promised to abolish all duties on spare parts to turn around to abolish duties on some selected spare parts only.

Selected Duties:

In the budget statement page 136 paragraph 796, the government proposed to parliament to abolish all duties on the importation of all spare parts only for them to present a bill to Parliament that seeks to abolish only import duties on selected spare parts.

Duties such as 15% VAT, 2.5% NHIL, EDAIF levy, etc etc were conveniently excluded from the list of duties that the should have been abolished as communicated by the policy statement of the President.

Temporary Tax:

It is important for Ghanaians to understand that because Ghana has elected to be part of the ECOWAS Common Eternal Tariff, Ghana can only ask for exemptions up to 170 exempt lines for a period of 5years since 2015. After the expiry of the 5-year period, the exemption ceases to apply. This tax exemption can only be applicable until the year 2020. And cannot be a permanent tax exemption as we are made to believe.


It is also interesting to note that this government in their policy statement to parliament and other commentaries after the approval of the budget have maintained that this spare parts exemption are being delayed because they are waiting for an approval from Ecowas Common External Tariff Secretariat (CET).

Today, we are being informed that Ghana does not require CET approval because Ghana has 170 exempt lines which we have not exhausted. Is the government not aware that it would not require CET approval before using it as an excuse for the delay in its implementation, or it is because they wanted to collect the revenue as has been their stock-in-trade, that they announce a tax reduction with speed but fails to implement it?

I rest my case.

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