Govt urged to remove tariff barriers to boost transit trade
Government has been urged to remove what has been described as tariff barriers that have made the country’s ports unattractive for transition of goods.
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Some of these tariff barriers include the two per cent special import levy which was introduced in 2013, the one per cent service charge to single window, and the 17.5 per cent VAT on transit services.
This was disclosed by Borderless Alliance Ghana in its position paper to government which was presented at a forum in Accra.
The government, in 2013, introduced a temporary special import levy of two per cent on cost, insurance and freight value of import.
This was to be applicable between 2013 and 2015 and to be paid at point of entry into Ghana. This was, however, extended to 2017 as a revenue measure.
The government also, upon refusing to renew the contracts of the Destination Inspection Companies (DICs), decided to award the National Single Window operation to a private operator.
While maintaining the same service charge of one per cent, importers are also expected to pay an additional 0.4 per cent charge to GCNet for customs declaration processing.
The Borderless Alliance believes that the removal of these two tariffs alone would save importers more than GH¢16 million per month (calculated using Ghana Revenue import tax collection figure from the year 2014 and assuming equal tax collection level for 2016).
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It said the government also had to review the 17.5 per cent VAT on transit services which the GRA levied on all Ghanaian and non-Ghanaian operators in the country.
“In fact, Ghana is the only country in the surrounding region to levy this kind of charge and this makes transit services through the country less competitive,” it pointed out.
Bold step
The Chief Executive Officer of the Ghana Shippers Authority, Dr Kofi Mbiah, also added his voice to the call, stating that it was time for governments within the sub-region to take the bold step of removing tariff and non-tariff barriers.
He believed this would cut down on delays and associated costs and improve trade flows as a means of improving the well-being of the countries.
“It is my hope that our deliberations today will not only throw light on the many benefits that can be derived from these agreements but serve as a catalyst for the adoption of the necessary measures towards their implementation,” he said.
Commitment to free movement
The Minister of Transport, Mr Kwaku Ofori Asiamah, for his part, said Ghana as a key member of ECOWAS was fully committed to the adherence to its policy, regulations and programmes aimed at addressing the free movement of goods and services.
Over the years as enshrined in the various ECOWAS protocols, he said the country had made efforts at facilitating the transit trade on its corridor to ensure that movement of persons and cargo were not hindered.
“Consequently, the Ghana Shipper’s Authority was mandated to collaborate with the Sister Shipper’s Councils of the landlocked countries of Burkina Faso, Mali and Niger who use Ghana’s corridor as transit corridors for their imports and exports in order to promote trade among these countries,” he stated.
“It is noted that in a bid to ensure its commitment to these protocols, facilitate and promote the transit trade along its corridor, the Ghana Shippers’ Authority had signed MoU’s with her counterparts in Burkina Faso, Mali and Niger to its effect,” he added.
Trade facilitation policies
The Minister of Trade and Industry, Mr Alan Kyerematen, in a speech read on his behalf, said with the lowering of traditional market access barriers, high trade transaction costs had become one of the most important obstacles that developing countries faced in their bid to benefit from globalisation.
He said the ability of firms to move goods and services across borders rapidly, cheaply, and above all predictably had become a critical determinant of export competitiveness.
Globally, it is expected that the Trade Facilitation Agreement, if well executed, will shore up the US$22 trillion world economy by about US$1 trillion through expedited movement of goods across borders, improved transparency and predictability of trade.
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Mr Kyerematen said trade facilitation policies could therefore have important benefits for development as they could stimulate trade, attract foreign direct investment, improve the collection of trade taxes and reduce incentives for smuggling and corruption with the resultant reduction in transaction costs.
“As part of its priority programmes to improve the business environment and regulatory reforms for industrial development, government has put trade facilitation at the centre of trade reforms in Ghana,” he stated.