50% benchmark value reversal to start tomorrow

50% benchmark value reversal to start tomorrow

An implementation of the reversal of the 50% benchmark value on imports is scheduled to come into full swing from Tuesday, January 4 2021.

Up to 143 items under three categories will be affected as prescribed by the Ghana Revenue Authority.

The benchmark policy was introduced by the government in 2019 and this was in line with the World Customs Organisation Policy of regular review of valuation database.

Under the policy, some commodities are benchmarked to the prevailing world prices as a risk management tool to show the true market dynamics of these commodities.

 Factors such as protection of health, the environment, and security, as well as protection of local industries are considered.

In preparation for the reversal, relevant stakeholders were consulted with the aim of reaching a consensus on the implementation of the policy.

 The government had hoped the benchmark value reduction would translate to lower prices of goods in the country, as well as reduce smuggling. But according to the government that did not happen as such goals did not materialize.

The benchmark value, which is considered as the amount taxable on imports, was reduced by 50 per cent for some goods. Import duties for goods such as cars were reduced by 30 per cent.

It was the government’s dream that easing the import regime would make Ghana’s ports competitive by increasing the volume of transactions and increasing revenue generated at the ports.

But as the government pushed its industrialisation drive, critics, like the Association of Ghana Industries did not agree with such a policy as they also called for a review of the benchmark value reduction policy since it was affecting them.

It argued that imports that compete with locally manufactured products must be exempted from the policy as part of a cushion for local products.

The Ghana Union of Traders Associations had earlier called on its members to oppose the development. The union argued that importers had to contend with increases in exchange rates, the cost of freight, among others. The Union threatened to push any increased cost on consumers.

By: Stella Annan | myactiveonline.com Twitter @activetvgh

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