‘Terrible decision’ to reverse benchmark value will lead to high costs of goods by 30%-50% – NDC

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The National Communications Officer of the National Democratic Congress (NDC), Sammy Gyamfi, has said the decision by the government through the Ghana Revenue Authority (GRA) to reverse the benchmark value is a terrible decision that comes at a time when the cedi is depreciating and world commodity prices are increasing at an alarming rate, with freight charges and port handling charges being extremely high.

He said more importantly, “the callous decision by government to reverse benchmark value discounts comes at a time Ghanaian businesses, startups, parents and households are reeling under a yoke of excessive taxation, persistent increases in fuel prices and
high cost of living never before witnessed in the anals of our country.”

The reversal affects 143 items under three categories prescribed by the Ghana Revenue Authority.

The benchmark value, which is the amount taxable on imports, was reduced by 50 percent for some goods. The government had hoped that this was going scale up he volume of transactions of make Ghana’s ports competitive.

The government decided to reverse this decision after it met opposition from Association of Ghana Industries and the Ghana Union of Traders Association (GUTA).

But addressing a press conference in Accra on Wednesday January 5, Sammy Gyamfi said “what the decision to reverse benchmark value discounts effectively means is that, prices of the affected items such as; vehicles and spare parts, machinery, equipment and plants, aluminum finished products (roofing sheets), portland cement, cement paper bags, and clinker, poultry, animal products (meat), fish, rice, sugar, pasta, spaghetti, noodles and macaroni, pharmaceuticals (including drugs such as paracetamol, condoms etc.), toilet paper, facial tissue and towel, chocolate, toffees and chewing gum, palm oil (crude and refined oils), mosquito coils, ceramic tiles, tile cement, machetes, plastics, textile and textile articles, fruit juices, tomato paste and ketchup, furniture and parts, boxes of paper and paperboard cases of corrugated paper, iron steel bars, toilet soap and laundry bar soap, detergents washing powder, lubricating oil, soft drinks and carbonated drinks, biscuits/wafers, among others; will all go up by
30%- 50% in the coming days.

“These increases which will eventually be passed on to Ghanaians will further escalate prices of general goods and services in the country and exacerbate the severe hardships Ghanaians are already reeling under. This will ultimately increase the cost of doing business in the country, negatively affect turnover of businesses and the volume of trade in the country, and lead to the
collapse of many businesses and jobs.

In fact, the bitter reality is that, given the many draconian taxes that have been introduced by the callous Akufo-Addo/Bawumia/NPP government since April 2019 and the continuous depreciation of the Ghana Cedi which is already eroding profit margins and the capital of businesses, importers and Ghanaians in general will be worse off as a result of this decision. In
short, import duties will be far higher than they were before April 2019 when the benchmark value discounts were introduced, in view of the continuous free fall of the Cedi and the raft of new crippling tax measures that government has introduced since April 2019.”

Meanwhile, the Executive Secretary of the Importers and Exporters Association of Ghana (IEAG), Sampson Asaki Awingobit, has said he would sue the government over the reversal of the 50 percent benchmark on value on imports if the GRA does not stop the move.

He told 3FM’s Napo Ali Fuseini in interview on Wednesday January 5 that the reversal smacks of illegality for which he is calling on the GRA to stop.

“This benchmark value issue has to be dealt with legal way because. This benchmark value issue is illegal on its own. You cannot say you have created a data trade price somewhere that nobody knows how and manner you are getting the price data,” he said.

The IEAG said this decision would be detrimental to the business community if it is not stopped immediately.

According to the IEAG, it would also lead to many businesses losing their cargoes since importers would have to pay more outside their budgets even at this crucial time at the beginning of a new year.

A statement signed by their Executive Secretary Sampson Asaki Awingobit said on Tuesday January 4 that ” the position taken by government and by extension the Ghana Revenue Authority GRA on this matter would be detrimental to the business community if it is not reversed immediately.

“It would lead to many businesses losing their cargoes since importers would have to pay more outside their budgets even at this crucial time at the beginning of a new year. In the very likely event that such importers are not able to raise the additional funds to clear their goods on time, issues of uncleared cargo lists UCL would pop up and huge loses to demurrage would set in.

“Therefore, the IEAG is calling on the government and for that matter the GRA to withdraw this directive with immediate effect. The IEAG demands that such importers be given at least 14 working days to clear their already cleared cargoes from the port without the new 50% benchmark values.”

Mr Awingobit further revealed that he would sue the the government if it doesn’t alt the reversal.

By Laud Nartey|3news.com|Ghana