CEPS Improves Revenue Collection With Introduction of GCNet

Tema, March 16, GNA - The Customs, Excise and Preventive Service (CEPS) is the state organisation responsible for the collection, protection and accounting for export and import duties, import VAT, petroleum tax and other taxes. It is estimated that CEPS collects about 50 per cent of total government revenue, used to finance the country's recurrent budget and development projects in the health, education, transport and other sectors of the economy.

CEPS also ensures the protection of state revenue by preventing smuggling, which is done by physically patrolling the borders and other strategic points, examination of goods and premises as well as documents relating to goods.

In addition to the revenue functions, CEPS performs agency duties on behalf of other government organisations and ministries by seeing to the enforcement of laws on import and export restrictions and prohibitions. With the introduction of VAT, for example, CEPS collects import VAT on behalf of VAT Service.

To ensure efficiency and higher productivity, CEPS has streamlined and fully automated the customs processes and procedures under the Ghana Customs Management System (GCMS) and Ghana Community Network (GCNet). This computer programme became operational at Kotoka International Airport (KIA) in January 2003; Tema Port in May 2003 and Takoradi Harbour in November 2003.

Mr Emmanuel Darko, Director of GCNet, told the Ghana news Agency that the GCNet has reduced the average goods clearance time frame from three days to four hours and improved revenue collection, while manual procedures that took place in the long room were no more.

The new system has shot up revenue by 49.4 per cent. Previously, import and export business was plagued with breaches and incorrect declarations coupled with human errors.

The TradeNet is an Electronic Data Interchange (EDI) platform, for the transmission of messages and replies electronically between various parties involved in the import and export process and connected to the system. The GCMS on the other hand, processes cargo manifests, the various customs entries, and the related duty and tax payments electronically, with an on-line facility that enables users to access customs database that defines all customs codes, regimes, tariffs and exchange rates.

There is also a messaging system that receives and sends messages through the TradeNet, as a basis for the provision of a seamless, interactive electronic platform for trade operators.

The electronic GCNet milieu eliminates manual interventions and its inherent duplications. As data entered into the system is available to any authorised person/agency with access to a particular field in the system, it does not have to be re-entered in the system.

This is because by imputing any unique data; any relevant associated data can be accessed, subject to having authorised access to the other related data. In this way, mistakes are considerably reduced, the process is expedited and delays are avoided.

Within customs, in particular, the manual processes that used to take place in the long room such as Face Vat, computer input, and numbering are all eliminated and internalised within the system. This has removed the paper work and human interface at this level and enhanced trade facilitation.

GCNet is also able to plug any possible revenue leakage arising from the inability to securely match all manifested or un-manifested consignments against declarations made. This is because all manifest details are integrated into the system before the clearance process starts, and this is then "acquitted" one by one as goods are cleared. In this way, it provides a systematic monitoring of consignments to ensure all due duties and taxes on the consignments that are paid, except there is deliberate smuggling of consignment from port.

With regard to Centralized Verification of Entries, the GCNet system ensures that regardless of clearance station, a uniform and consistent valuation, classification, nomenclature, exchange rate are applied. Therefore, the discretionary application of certain codes and regimes is thus eliminated with its possible revenue leakage. The GCNet system also builds up a Transactional Price Database (TPD) and thus enhances CEPS capacity to develop its own valuation system, independent of valuation opinions proffered by inspection companies.

On Transit goods, through the usage of appropriate codes, transit goods can be processed at the ports promptly to facilitate trade flows, whilst ensuring that the necessary data on them are captured. From the revenue angle, through a double entry arrangement that ensures that the consignment is accounted for at the exit point, the declaration is closed from the system; diversion of transit goods into "home consumption" is prevented.

With regard to revenue, import duty collections at KIA since January 2003; have seen a six-month average increase of 33.42 per cent for Import Duty and 44.1 per cent for Import VAT as compared to the 2002 collection. The 2002 import trade value through KIA was 180.87 billion cedis, while that of 2003 was 294.89 billion cedis, which represents 63.4 per cent increase. That of Takoradi in 2002 was 236.16 billion cedis and in 2003 it was 266.34 billion cedis, an increase of 12.78 per cent.

Mr Kofi Danquah, CEPS Assistant Commission, Long Room, Tema, in an address at an end of the year party, said CEPS saw all the collections, departments and stations in customs as equally important, however, when it came to revenue mobilization, then Tema was considered as the nerve-centre and heart-beat of the Service, because about 80 per cent of the total revenue collected by Ghana Customs is generated by the Tema Collection.

He announced that in 2003, "we exceeded our target by over 20 per cent and collected 5,360,954,912,261 (5.4 trillion cedis). Mr Danquah said apart from "shattering our target for the year," officers put up a very remarkable performance by detecting within three months (October to December 2003) as many as 324 short collections. This resulted in the recovery of 4,873,953,978 cedis as duties and pecuniary penalties. The pecuniary penalties ranged between five million to 150 million cedis.

The Assistant Commissioner said the Tema Collection point should have done better than what it did last year and said there were factors that optimum collection of revenue.

For instance: "If the Inspection Agencies had done intensive research to establish the correct values for imported items. If the Clearing Agents had weeded out the bad nuts among them; if some officers had been diligent and honest in their performance and dealings, if traders had submitted customs invoices that had not been doctored, if the public and for that matter, rival traders had reported the nefarious activities of their colleagues, if some port workers had not assisted traders to divert or smuggled goods from the port and if a little bit of motivation and recognition had come from the 'above', I am sure we could have done better than we did last year."

Mr Danquah attributed the greater part of their success story to the introduction of the GCNet/GCMS in Tema to replace the ASYCUDA. He said that they were still fine-tuning the GCNet/GCMS system; it has proved to be the best tool for effective mobilization and maximization of revenue for the county.

He noted that "GCNet/GCMS is a success story that should be told several times, adding with my experience in the CEPS, and with my association with customisations and implementation of the system, I feel greatly satisfied with what the system has so far done and can boldly say that the GCNet/GCMS is the best introduction to Ghana customs in particular and Ghana revenue mobilization in the 21st century.