The business community has expressed satisfaction at the vision of the Vice-President and flagbearer of the New Patriotic Party (NPP), Alhaji Dr Mahamudu Bawumia, which hints at doing away with some taxes, when he gets elected as president in the 2024 elections.
The President of the Ghana Union of Traders Associations (GUTA), Joseph Obeng, is elated at that vision, noting that Ghanaian traders, especially importers, are not competitive because of the numerous bottlenecks in the tax administration regime at the ports.
“I am overly excited. This is exactly what I wanted to hear, and I heard it. It means that they have been listening to whatever pleas that we have been making…the communication that we do with you, on TV and all that are being listened to,” Dr. Obeng said in an interview with the media after the Vice-President had outlined his vision for the nation.
“It’s all about him adopting compliance as a tool of revenue collection in his administration, and it’s going to simplify the collection system; that’s why he is talking about flat rate, and that is even going to make duty payments flat rated, starting with spare parts,” he added.
Members of the business community had raised concerns about the taxes slapped on them at the ports and its rippling effect on their businesses. For instance, the Association of Customs Housing Agents Ghana (ACHAG) said over-taxation was affecting business at the ports.
Yaw Kyei, the President of ACHAG, said the situation had opened up an avenue for smuggling because although traffic at the port had reduced, the goods were still on the market.
He observed that about 40 percent of Ghana’s imports were not realized at the recognized points of entry, adding that a lot of the goods were not coming in from the Eastern, Western, and Northern borders, or the seaports and the airport, but were rather being smuggled in to avoid taxes.
Even small and medium-scale cocoa processing companies were not left out because they were asked to pay 35% tax on import duties.
The cocoa sector regulator (COCOBOD) complained that it is a disincentive to cocoa processing startups and small and medium-scale enterprises (SMEs), and so could erode gains in promoting local value addition.
These SMEs produce mainly for the domestic market, and the tax is slapped on them when they purchase raw beans from licensed purchasing companies – even the beans sourced locally. In addition to this, they also pay other taxes at a combined rate of 63 percent.
Dr. Joseph Obeng, in an interview last year, claimed that the 19 duties and levies that are charged at the ports were the highest in the sub-region, making it more preferable to conduct business using the backdoor.
According to him, Customs officers tend to upgrade invoice values using their discretionary powers, thus creating more costs for importers.
Dr. Obeng also spoke on the proposed five-year post-clearance audit highlighted by Vice-President Bawumia in his address, and said it would go a long way to help GUTA members in their businesses.
“So, what he is saying is that he is going to expand the tax net…He said that; because that’s why he started with the TIN (Tax Identification Number), and that has captured a lot of capable taxpayers who are outside the tax net…Again, that’s what he’s going to use to make taxes affordable so that everybody will pay eventually,” the GUTA boss said.
Dr Obeng believes when that is done, it is going to take away all the leakages in the tax system, and “it means nobody is going to take advantage…not the Customs officer or the agent or even the trader because everybody knows that this is the flat rate that everybody will have to pay.”
He expressed confidence in Dr. Bawumia, saying he believes if he is voted as president, he can and will roll out these important tax reforms at the ports.
He urged all political parties to emulate the example of Dr Bawumia in appreciating the needs of business people, and structure their policies around that.