The Government introduced the reduction in benchmark values on April 4, 2019, at all of the country’s ports.
Explaining the purpose of the introduction, President Akufo-Addo told a crowd at a Town Hall meeting at Worchester, Massachusetts “We have realised from the studies that our ports are not competitive, and the import regime in our country is far too high.”
Import duties were, as a result, reduced by 50 per cent, except vehicles which enjoyed a 30 per cent respite.
Seth Twum-Akwaboah who leads the AGI explains that this did nothing to promote locally manufactured products.
According to him, taxes on imported raw materials were already low, unlike finished goods.
“Raw material importers were not paying that much tax,” he disclosed in an interview.
Illustrating this, he said for instance “if you were importing at 5% and you have a 50% reduction, the gain there is only 2.5%. But if somebody who was importing finished products was paying 20% as duty and you reduce it by 50%, the gain there for him is 10 %,” he said to illustrate how “this the tax has had a terrible effect on industries.”
The impact of the reduction has been dire, he said.
Because of the reduction, “ a lot of companies are having to reduce the volumes of production because their market size is shrinking because finished products are coming in large volumes.“
Not only that, Twum Akwaboah added that “the GRA [Ghana Revenue Authority] is not meeting its target because the revenue that is supposed to be generated from import duties, is coming down as a result of the reduction,” he added.
While AGI is not against the introduction of the whole system, it wants it targeted at products that are not locally produced such as vehicles and computers.
“We expect that in the 2020 budget, there will be a review,” he pleaded.