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HomeCurrent AffairsHold on with implementation of benchmark policy reversal – GUTA

Hold on with implementation of benchmark policy reversal – GUTA

Hold on with implementation of benchmark policy reversal – GUTA

The Ghana Union of Traders Association (GUTA) has called on government to hold on with the implementation of the reversal of the benchmark value policy.

During the 2022 budget presentation by the Minister of Finance, Ken Ofori-Atta, he announced a reversal of the policy which is to take effect from January 4, 2022.

The reversal will affect 43 items under three categories prescribed by the Ghana Revenue Authority.

But GUTA insists, a reversal of the policy will unleash unthinkable hardship on its members as many are yet to fully recover from the “devastating effects of the COVID-19 pandemic.”

The association listed eleven reasons for which government should consider a rescission of its decision;

1. That the devastating effects of the covid-19 pandemic are still prevalent and even in its fourth wave which is worsening the situation.

2. That world commodity prices are still high and going up, with freight charges being extremely high.

3. That the conditions that resulted to the introduction of the benchmark value policy are still prevalent and even worse.

4. That the prices of essential commodities such as food, pharmaceuticals and others will be extremely unbearable for the consuming public which will also affect turnover and volume of trade in the country, thereby collapse businesses.

5. That in the fight against the pandemic, prices of food items, pharmaceutical products etc. need to be affordable to the consuming public.

6. That our local manufacturers cannot meet demand of most of the listed items, therefore, we are not self-sufficient as a country, to surcharge the consuming public.

7. That the lack of competitiveness of our local industries is based on other factors rather than the benchmark value policy of which they (industries) are also beneficiaries.

8. That the exchange rate is also going up at this time.

9. That the competitiveness of the Ghanaian trader within the sub regional bloc- cross-border trade should also be conceded as very necessary and important.

10. That the government through the Economic Management Team had promised to engage stakeholders on the issue before any decision is taken but have not met yet.

11. That in the press conference of the Honourable Finance Minister, he acknowledged the fact that the reversal of the benchmark value would have an adverse effect on importers and that the government would find a mitigating factor to cushion the effect but this has not yet been done.

Background

Government introduced the Benchmark Policy in 2019 in accordance with the World Customs Organization’s policy of regular review of valuation database.

Under this policy, taxes on select imported goods were reduced by 50 percent.

The import value for cars was also reduced by 30 percent.

It was government’s hope that the reduction would translate to lower prices of goods in the country, as well as reduce smuggling.

But government says these goals have no materialised. Hence, the reversal.

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