Ghana to ban importation of ‘accident cars’, used vehicles older than 10 years

Nana Konadu Agyeman Mar - 03 - 2020 , 17:46 3 minutes read

Parliament has adopted and approved the Joint Committees on Finance, Trade and Industry and Tourism report for amendments to be made in the Customs Act, 2015.

The Customs (Amendment) Bill, 2020 seeks to amend the Customs Act, 2015 (Act 891) to provide incentives for automotive manufacturers and assemblers registered under the Ghana Automotive Manufacturing Development Programme (GAMDP).

It will prohibit the importation of salvaged motor vehicles comprising wrecked, destroyed, or physically damaged by collision, fire, water or other occurrences as well as specified motor vehicles over 10 years of age into the country.

The Bill will also increase the import duty on specific motor vehicles and provide import duty exemptions for the security agencies and officers of the security agencies especially those who go on various assignments and peacekeeping in the security interest of Ghana.

Presentation of Bill

Graphic Online's Nana Konadu Agyeman who was in Parliament on Tuesday March 3, 2020 reported that the approval of the report came after a motion on the report was moved by the Deputy Minister of Finance, Mrs Abena Osei-Asare, and seconded by the Chairman of the Finance Committee, Dr Mark Assibey-Yeboah.

The Customs (Amendment) Bill, 2020, which has seven clauses to be amended, was presented to Parliament by the Deputy Minister of Finance, Mrs Abena Osei-Asare on behalf of the Minister of Finance and read the first time in the House on Tuesday, February 25, this year.

The Bill was subsequently referred the joint committees on Finance, Trade, Industry and Tourism for consideration and report in accordance with Article 174 of the Constitution and Orders 159 and 169 of the Standing Orders of Parliament.

Background

The government, in August 2019, launched the GAMDP to promote the manufacture of automobiles for both domestic market and the West Africa sub-region.

The programme is part of the efforts by the government to develop some strategic anchor industries that will promote economic development in the country.

Incentives for auto manufacturers

The report said the committee observed that Cabinet had already approved the Ghana Automotive Development Policy in which various incentives had been provided for automotive manufacturers and assemblers registered under the GAMDP.

Fiscal impact

The reported indicated that the committee was informed that the review in Policy as contained in the Bill would lead to an estimated revenue loss of approximately GH802.25 million for the first three years.

Ban on importation of certain vehicles

The report said the committee noted that upon the passage of the Bill into law, specified motor vehicles over 10 years of age “shall be eventually prohibited from being import into the country.

Importation of fully built units

The committee noted that vehicle manufacturer or assemblers registered under the GAMDP shall be permitted to import fully built units (FBUs) of vehicles into the country at a rebate of customs duty.

It said the rationale for the rebate was to enable the manufacturers and assemblers to attain certain critical volumes to make their investments worthwhile, especially at the early stages of the industry.

“The rebate policy is to be reviewed during or after three years of the GAMDP,” the report said.

Commencement of operations

The reported said the committee was informed that the Ministry of Trade and Industry was in advance discussion with the interested manufacturers.

It said Volkswagen would start its operation in the first quarter of 2020, Toyota in August 2020, Suzuki before the end of 2020, Nissan second quarter of 2020, while discussion pertaining to the operations of Renault, Kia and Hyundai were ongoing.