Import traders in Ghana have listed high tariffs and exchange rate depreciation of the local currency (Cedi) as the major threats their businesses were facing.
In an interview after discussions with Minister for Finance Ken Ofori-Atta and his team here Monday, President of the Ghana Union Traders Association (GUTA), Barima Ofori Ameyaw, lamented that import duty and taxes alone were eroding 52 percent of their trading capital.
“If cumulatively you are using 52 percent of your importing capital to pay duties, it doesn’t make sense. It means that you are simply telling us to stop importation. And how can we do without importation,” he wondered.
The chief merchant pointed out that the high tariffs were more of a disincentive to revenue mobilization arguing that the assumption that higher tariffs resulted in higher revenue returns was flawed.
“Any tax that is high does not yield any good results. Thatis why our duty rates have been high yet always they are falling short of revenue collection,” Ameyaw insisted.
According to him, Ghana could use tariffs as incentive to capture and control a large share of West African sub-regional trade.
Furthermore Ameyaw pointed out that the depreciation of the local cedi currency causes local importers to lose a chunk of their capital.
He explained that for individuals the resultant effect was the constant increases in fuel prices and transport fares whilst for importers it compelled them to either increase their prices constantly or sell at a loss.
Deputy Minister for Finance, Kwaku Kwarteng described the requests by GUTA as in line with the government’s vision of creating the enabling environment for private businesses to grow.
“We are entirely comfortable with the request they are making except to add that, as a government, we need to manage it. At some point you may even need to introduce a tax measure. At some point you take some off
“You use taxation as a tool to ensure economic activity grows. But ultimately it is our strategy to move away from taxation. That is why we are comfortable with the suggestion they have made,” Kwarteng explained.
Government is expected to introduce some new tax measures when it presents its Mid-Year Budget Review to parliament next month Enditem