Editorial: Reduction in benchmark values angers trade associations

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Government last week directed the exclusion of some imports from its reduction in benchmark values by a range of 30 percent to 50 percent, which has been implemented with effect from April 4, 2019.

This has not gone down too well with certain trade groups. GUTA’s Welfare Officer, Benjamin Yeboah, warned that the 50% reduction had gone a long way to ensure compliance by importers at the various points of entry, and with this reversed some importers might resort to smuggling.

His argument is that if smuggling should occur as a result of the reversal, government will lose revenue generated from the ports and borders. On the other hand, the Importers and Exporters Association of Ghana have also reacted angrily concerning the reversal – threatening that the move will inform how its members will vote in December.

From the standpoint of government, the reduction has simply not generated the desired results. Another possible reason could be that the Association of Ghana Industries has protested the benchmark value reduction, arguing that it has made imports more price-competitive against locally manufactured goods.

The Importers and Exporters Association of Ghana believes the reversal smacks of a lack of candor on the part of government, noting that it even happened to spare-parts dealers at Abossey Okai when they were promised a reduction in import duties.

Sensing the general dissatisfaction from its stakeholders, we believe some form of engagement with key stakeholders would have elicited a more accommodating response; or, at least, they would have been brought onboard.

However, the revelation has come as a shock – with some terming it a betrayal of trust. This could have been avoided had government sought the consent of key players before announcing the reversal. Anyway, Vice President Mahamudu Bawumia noted that the values applied by Ghana were much higher than those applied at competing ports – in some cases 100 percent to 200 percent higher – when he first announced the reduction in benchmark import values at the beginning of April 2019.

What has changed since then is hard to fathom, and that is why we can understand the frustration of importers and exporters. A middle-ground will have to be reached to gain consensus. Harmony between trade associations and the Ghana Revenue Authority is crucial for maintaining industrial peace.

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