Business News of 2013-12-20

Parliament passes Excise Stamp Bill

Parliament last Wednesday passed a Bill to introduce the fixing of tax stamps on excisable products imported or manufactured for consumption in Ghana.

The Excise Stamp Bill, 2013, was presented to Parliament and read for the first time by a Deputy Minister of Finance, Mr Cassiel Ato Forson.

Ghana has lost considerable revenue over the years through illicit trade, with illegal operators smuggling tobacco and other products into the country, as well as indulging in the sale of counterfeit products.

Goods in transit, particularly cigarettes and spirits, are often diverted into the country and sold on Ghanaian markets.

The current inspection, verification and monitoring procedure made it difficult to detect these goods on the market.

These illegal activities put legitimate brand owners and businesses at a competitive disadvantage and undermine the local economy.

These developments have necessitated the introduction of measures to improve current inspection, verification and monitoring procedures as part of efforts to increase revenue collection, block loopholes in tax regime and address other challenges.

Tax Stamps

The use of tax stamps and banderols on selected excisable products have been identified as effective means of addressing these challenges.

The Minister of Finance told the finance committee that the country that loses between 15 and 20 per cent of excise revenue due to counterfeiting, mangling and other illegal activities aimed at evading excise duty.

That, according to him, translated into a revenue loss of about GH¢50 million to GH¢65 million annually.

The bill will, therefore, minimise the persistent problems of smuggling and tax evasion which impacted negatively on revenue, as well as challenges associated with the interdiction of such goods on sale on the Ghanaian market.

The effective date for the implementation of the tax is January, 2014 since like many taxes, administrative measures are more convenient to both importers and tax authorities when implementation begins at the beginning of a financial year.

Moving the motion for the third reading of the Bill, Mr Forson expressed the hope that the introduction of the Bill will minimise the amount of counterfeit products on the Ghanaian market and rake in more revenue for the country.

He was supported by the Chairman of the Finance Committee of Parliament, Mr James Klutse Avedzi.