Monday, September 25, 2023

Benchmark values have been cut to 30% and 10% for goods and automobiles, respectively.

After months of agitation and weeks of consultations with stakeholders in the trading community on the benchmark values reduction policy, the government has finally concluded on a 30 percent discount for all goods and 10 percent for vehicles.

According to the government, this development, which will take effect from March 1, 2022, allows for a win-win situation for all parties involved.

Initially, a discount of 50% was applied on the benchmark values of selected goods, while a 30 percent discount was applied on vehicles.

A deputy Minister of Finance, Abena Osei Asare, confirmed the new development to Citi Business News after a final meeting between the Finance Ministry and the concerned parties on Tuesday, February 22, 2022.

“Several meetings had gone on between the Trade Ministry, GUTA and AGI and as part of the consensus that we have built with all the stakeholders, the reversal of benchmark values is going to be graduated. It’s not going to be a complete reversal. With the first phase, all goods are going to be reduced from the 50% discount to a 30% discount. The benchmark values were on two things; some selected goods and vehicles. But this time, we are placing the discount on all goods and that of vehicles, from 30% to 10%.”

She continued, “When the Minister for Finance engaged the stakeholders on Tuesday, they welcomed what government has done because they realized that government had indeed listened to them and, as a result, come up with something that will best serve all parties.”

Abena Osei Asare is also confident that this new development will help the government and the Ghana Revenue Authority meet the GH¢80.3 billion revenue target for the year 2022.

She stated, “What I can say is that it’s going to help us achieve our GH¢80.3 billion revenue target set out in the 2022 budget. So we look forward to it. We’ll give them all the support that they need to enable them implement it to enable them to be guided by what we have done so that at the end of it all, it is Ghana that will benefit.”

The policy has, since its inception, received varied views among players within the port and trading industry.

When government in 2019 announced the decision to reduce benchmark values for some general goods by 50% and 30% on cars, the idea was to increase volumes of traffic at the port and ultimately increase government revenue.

While importers and exporters, freight forwarders as well as the Ghana Union of Traders’ Association praised government for how the decision reduced the cost of doing business, groups such as the Association of Ghanaian industries were concerned about the impact on the competitiveness of their products.

But government nonetheless went ahead with its implementation.

Two years down the line, the government announced the reversal of the benchmark value reduction policy in the 2022 budget and set January 4 as the implementation date of the policy.

That was met with stiff resistance from the trading community, with GUTA hinting of a 50% increment in cost of goods and services if the policy is implemented.

On January 4 however, business was on standstill at the ports as freight forwarders who had made their declarations and accepted their duties could not proceed to make payments.

This led to a temporary postponement of the date to Jan 6 and later to Jan 17 for stakeholder engagements. The Presidency subsequently suspended it and gave the GRA a Jan 17 deadline to consult on the matter.


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