Minority Spokesperson on Finance, Cassiel Ato Forson, contended that the Customs Amendment Bill approved by Parliament is aimed at getting the necessary legislative backing to remove the import duties on spare parts, is only fulfilling partially what was promised in the budget.

Parliament on Tuesday approved the Bill which seeks to give legal backing to the tax cuts on import duties, pending approval by President Nana Addo Dankwa Akufo-Addo.

[contextly_sidebar id=”TIqCzH7DY3HyrYCPSEy0kOc8LMhTYUw4″]According to Ato Forson, the new Bill only removes a section of the import tax, but other equally important levies such as import VAT and import NHIL, will still be in force after the approval.

The abolition of import duties on spare parts is one of the several tax cuts captured by the 2017 budget, and hyped by the New Patriotic Party (NPP) government to alleviate the burden on spare parts importers and Ghanaians as a whole.

But speaking to Citi News on Tuesday, Cassiel Ato Forson insisted that, the new  Bill is contrary to what was promised Ghanaians.

“From the onset when the budget was read, I made a point that this budget is very deceptive and the intent that the budget had communicated, the implementation will be different. And I’ve been proven right. Government has brought an amendment to the customs act contrary to what the budget signaled that they intend to do. They said that they intended to abolish and they used the word abolish. They said the intent is to abolish import duties on spare parts. Now the spare parts have all of a sudden become selected…and contrary to what they [NPP] are saying, it’s only about 60 percent of the spare parts that they are removing the taxes on. “

“The taxes they are removing are not the entire duties, but some import duties. When you say duty on spare parts, we have import duties which they have removed some of them, but import VAT and import NHIL is still staying. So my caution is that, our brothers and sisters in that industry should be aware that the duties that have been abolished today as a result of the passage of this bill waiting for the President to assent, we will not get blanket exemption but rather what we will get is that, only import duties will be exempted, but the Import VAT and import NHIL still stay and they are going to pay that. “

He also added that, Ghanaians should be mindful that the tax cuts are temporal, and would return in the year 2021 following some ECOWAS treaties which Ghana had signed.

“…This tax can only last up to 2020 and in 2021, no matter who is in government it is going to come back. I’m saying this because Ghanaians need to be educated on  that so that tomorrow when this tax comes back they would not say that government A has done this and government B is trying to do something else,” he added.

Meanwhile, a Deputy Minister for Finance, Kwaku Kwarteng, argued that government has conducted extensive consultations on the tax amendment; hence they are optimistic that it will bring relief to spare parts dealers.

“…I also would like to state that, what government is seeking to do with this measure is to remove its own contribution to the price buildup of spare parts in the country, with the objective that this will be translated to the benefit of businesses and the consumers of transportation services,” the Deputy Minister added.

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By: Godwin Akweiteh Allotey & Duke Mensah Opoku/citifmonline.com/Ghana
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The post ‘Deception’ in spare parts import duty cut exposed – Ato Forson appeared first on Citi 97.3 FM - Relevant Radio. Always.

At least, this is the indication from the industry with the implementation of the scrapping of the 1 percent special import levy by the GRA.

[contextly_sidebar id=”qAogGIuGzjWkwGHbZdRI7r9VdogPstWJ”]The businesses were tipped to benefit from the tax cuts to ease the cost of doing business in Ghana.

But the situation may not be so. The news of the scrapping of the taxes on imported spare parts was met with much appreciation by spare parts dealers at Abossey Okai, here in the nation’s capital.

The traders were already indicating some price cuts following the elimination of the taxes. But the implementation of such juicy appears to be out of the radar.

Apparently not happy with the development, the importers describe the move as a display of betrayal.

The Executive Secretary of the Importers and Exporters association, Sampson Asaaki Awingobit, explained their frustration to Citi Business News.

A statement by the Acting Commissioner General of the GRA, Emmanuel Kofi Nti, directed officers at the ports and customs to adhere to the implementation of the 1 percent special import levy from last Friday.

Citi Business News’ checks have revealed that, the HS codes that were referred to by the directive from the GRA, only centered on Chapters 84 and 85 that affect electrical machinery and their parts, as well as nuclear reactors, boilers, machinery and mechanical appliances and their parts.

In the HS code, Chapter 87 rather centers on the vehicles other than railway or tramway rolling stock and parts and accessories thereof.

Information available to Citi Business News also indicates that, the government is currently engaging the spare parts dealers to identify lists that will be affected by the tax cuts.

This is however subject to the ratification by Parliament since they fall under the Common External Tarrif whose review is subject to a minimum of five years.

Meanwhile, a tax analyst, William Demetia, has predicted dire consequences for all stakeholders.

He however urged the government to manage expectations.

“I think that we need to manage expectations…some people labour under the assumptions that there will be no charges on their goods. Apart from the duties, there are other components that are worked on before the imported goods leave the ports. All these would have to be explained for people to understand that it is only the import duties that will be taken away,” he remarked.

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By: Pius Amihere Eduku/Jessica Ayorkor Aryee/Lawrence Segbefia/citibusinessnews.com/Ghana

The post No tax cuts for Abossey Okai spare parts traders appeared first on Citi 97.3 FM - Relevant Radio. Always.

The traders said the move relieves them of a huge burden that has over the years prevented them from expanding their businesses.

When Citi News’ Kojo Agyemang got to Abbosey-Okai after the announcement today [Thursday], the area was thrown into a frenzy with most dealers in a jubilant mood.

Abossey Okai is one of Ghana’s major destinations for auto mechanic services and auto parts sales.

Ghana’s Finance Minister, Ken Ofori Atta, during his presentation of the 2017 national budget statement and economic policy in Parliament, announced among others some twelve tax scrapping and in some cases a reduction, including the cancellation of levies imposed on head porters popularly known as ‘kayayei’.

Ahead of the 2016 general elections, the then incumbent president, John Mahama of the National Democratic Congress (NDC) and the New Patriotic Party’s (NPP) Nana Akufo-Addo, both made promises of bettering the lot of traders in the area, by addressing issues of duties on the importation of spare parts, which is a major part of business undertaken by the traders there.

Following the announcement of the NPP’s Akufo-Addo as the winner of the December 2016 presidential elections, dealers in the area announced a discount on their products allegedly in solidarity with the new government, a claim which was subsequently denied.

Below is a list of the taxes abolished and reviewed by the government.

Abolished

– 1 percent Special Import Levy;

– 17.5 percent VAT/NHIL on financial services;

– 17.5 percent VAT/NHIL on selected imported medicines, that are not produced locally;

– Initiate steps to remove import duties on raw materials and machinery for production within the context of the ECOWAS Common External Tariff (CET) Protocol;

– 17.5 percent VAT/NHIL on domestic airline tickets;

– 5 percent VAT/NHIL on Real Estate sales;

– Excise duty on petroleum;

– Special petroleum tax rate from 17.5 percent to 15 percent;

– Duty on the importation of spare parts;

– Levies imposed on kayayei by local authorities;

– Taxation, the gains from realisation of securities listed on the Ghana Stock Exchange or publicly held securities approved by the Securities and Exchange Commission (SEC);

Reviewed

– Reduce National Electrification Scheme Levy from 5 percent to 3 percent;

– Reduce Public Lighting Levy from 5 percent to 2 percent;

– Replace the 17.5 VAT/NHIL rate with a flat rate of 3 percent for traders; and

– Implement tax credits and other incentives for businesses that hire young graduates.

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By: Jonas Nyabor/citifmonline.com/Ghana
Follow @jnyabor

The post Abossey-Okai spare parts dealers jubilate over tax cut [Video] appeared first on Citi 97.3 FM - Relevant Radio. Always.

The Minister of Finance, Ken Ofori Atta, announced the removal of this among others the government considers “nuisance taxes” to promote growth in the private sector.

They include the tolls charged head porters locally known as ‘Kayayei’ who move from the north to the south of Ghana to engage in several menial jobs.

Ken Ofori Atta made the announcement, while delivering to Parliament the 2017 budget statement and economic policy on Thursday, March 2, 2017.

He noted that, although some of the taxes were introduced by the erstwhile National Democratic Congress (NDC) government to raise revenue, they have proven to be unprofitable means of raising money, and had rather become a burden to the private sector, stifling their development.

“A number of tax measures have been introduced in recent years in an attempt to deal with revenue shortfalls. Some have proven to be nuisance taxes. They have no revenue yielding potential, and at the same time impose a significant burden on the private sector and on the average Ghanaian citizen. As part of our commitment to re-energize the private sector, the government has decided, as pledged, to review these taxes to provide relief for business. ”

List of taxes abolished

– The 1% Special Import Levy

– Kayayei market tolls

– 17.5% VAT/NHIL on financial services

– 17.5% VAT/NHIL on selected imported medicines that are not produced locally

– 17.5% VAT/NHIL on domestic airline tickets

– Duty on imported spare parts

– 5% VAT/NHIL on Real estate sales

– Exercise duty on petroleum

List of reviewed taxes

– Corporate income tax to be progressively reduced from 25% to 20% in 2018.

– Replace 17.5% of VAT/NHIL with 3% flat rate for traders

– Tax credits and other incentives for businesses that hire young graduates from tertiary institutions

– Tax incentives for young entrepreneurs

– Reduce special petroleum tax rate from 17.5% to 15%.

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By: Jonas Nyabor/citifmonline.com/Ghana

The post Taxes on imported spare parts; kayayei abolished appeared first on Citi 97.3 FM - Relevant Radio. Always.

The President, sought to woo the spare parts dealers ahead of the 2016 general election, in an area which is largely the stronghold of the opposition NPP.

President Mahama is today [Thursday], touring parts of Accra including the Kaneshie market, Agbogloshie, Osu and Adabraka with his message of ‘Changing Lives, Transforming Ghana.’

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By: Awudu Mahama & Kojo Agyeman/ghelections.com/Ghana

The post Mahama woos Abossey Okai spare parts dealers [Photos] appeared first on Citi 97.3 FM - Relevant Radio. Always.