Business News of 2014-06-18

Gov’t losing revenue from undervaluation of some imported fruit juices

Government lost over GH¢2.1 million in revenue from the undervaluation of some imported fruit juices into the country between January and May this year alone.

According to sources within the industry, the importer, distributor and wholesale prices at which some brands are sold in the country lend credence to the strongest assertion that there is serious manipulation of the import values and possible collusion by the importers and suppliers to enable them pay less to customs.

The sources further said the agreement on Customs Valuation recommended the use of actual price paid or payable subject to specified adjustments.

However, there are serious issues on the declared values of imported fruit juice purported to be the actual prices paid.

“The differences in he declared invoiced prices of some particular fruit juices raise serious valuation issues if compared to fruit juices of comparable quality,” the sources explained.

The sources further said the nature of the undervaluation of the imported fruits juices were serious and called on the government to take immediate action to check the practice.

“We produce the same products in the country, pay the right taxes and give employment to many Ghanaians but some of the fruit juice importers undervalue theirs” adding that “when they do so, they are able to sell at cheaper prices because they pay less to the state in terms of taxes,” one source said.

The sources said, for instance, the deductive approach used as the base value for either the distributor price or the retail price of some of the imported products made from fruit nectar gave considerably higher Freight on Board (FOB) values than those declared.

The sources described the practice as most unfortunate and noted that until the practice was halted, the government would not be able to meet its revenue target because the practice was widespread.

The sources noted that in mid-2013, the customs division of the Ghana Revenue Authority (GRA) undertook some remedial measures to block those loopholes but said the bad practice had reared its head again and was causing serious challenges at the points of entry.

“The government should not sit down and allow some unpatriotic importers to rip the state off what it deserves and that is why we want some action now,” they said, adding that “we have petitioned the appropriate authorities but nothing seem to be done about it now”.

Meanwhile, the Deputy Minister of Finance, Mr Cassiel Ato Baah Forson, who visited the GRA during the week, had asked the agencies to ensure that all leakages in the system were blocked to enable them to meet their targets.

The directive comes on the heels of calls on the revenue collection agencies of the Ghana Revenue Authority to up its game to meet the revenue targets set for them.

Source: graphic.com.gh
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