Remove compounding taxes crippling traders, importers – IEAG

The Importers and Exporters Association of Ghana (IEAG) is calling on the government to remove compounding taxes crippling traders and importers.

In a statement, the association noted that with inflation hovering above 50% coupled with the depreciation of the cedis in recent times, it is high time government took urgent steps in scrapping some of the taxes it introduced in 2022, so as to cushion traders and consumers as a whole.

The statement signed by Samson Asaki Awingobit, the Executive, Secretary, further noted that in 2022 the NPP government introduced the GetFund Levy 2.5%, NHIL Levy 2.5%, and the Covid Levy 1% which totalled 6%.

These levies, according to the Importers and Exporters, are charged on Cost-In-Freight and insurance (CIF) plus Duty at the point of clearance, meaning the charges amounts to 7.2% of CIF value.

“Ironically these same 7.2% Levy is charged at the time of supply of goods from the importer to the wholesaler. The same Levy is charged at the time of supply of goods from the wholesaler to the retailer, and onward from the retailer to the consumer. This means the total compounding Levy after these transactions are 28.8%,” the statement said.

It added that “this shows clearly that if the government decides to scrap or review these levies, the current astronomical inflation rate could see a significant drop.”

Find details of the full statement below:

PRESS RELEASE BY THE IMPORTERS AND EXPORTERSASSOCIATIONOFGHANA

GOVERNMENT MUST REMOVE COMPOUNDING TAXES CRIPPLING TRADERS AND IMPORTERS

The rippling effect of the country's crumbling economy on businesses has become a major concern for the country at large. It is frustrating to note that Importers and traders are at the receiving end of these challenges which could have been long prevented with the implementation of drastic measures by the leaders in charge of the economy.

With inflation hovering above 50% coupled with the depreciation of the cedis in recent times, the Importers and exporters association believes its high time government takes an urgent step in scrapping some of the taxes it introduced in 2022, so as to cushion traders and consumers as a whole.

It's imperative to note that the current dollar rate at a buying and selling exchange is pegged at 13 and 11 Ghana cedis as of 15th January 2022. And this could have direct repercussions on both Importers and traders with the vulnerable public suffering the most.

In 2022 the NPP government introduced the GetFund Levy 2.5%, NHIL Levy 2.5% and the Covid Levy 1% which totalled 6%.

These levies are charged on Cost-In-Freight and insurance (CIF) plus Duty at the point of clearance, meaning the charges amounts to 7.2% of CIF value. Ironically these same 7 2% Levy is charged at the time of supply of goods from the Importer to the wholesaler. The same Levy is charged at the time of supply of goods from the wholesaler to the retailer, and onward from the retailer to the consumer. This means the total compounding Levy after these transactions are 28.8%.

This shows clearly that if the government decides to scrap or review these levies, the current astronomical inflation rate could see a significant drop.

We as well urge the government to maintain the current rate by customs at the Port for the next three months to cushion traders, since any decision by the government to go contrary based on the current dollar rate will rather worsen the plight of Importers and traders.

The association in unionism with its relevant stakeholders also call on the government to shelve the planned implementation of the 2.5 VAT levy owing to the fact that, "We are Not In. Normal Times"

Signed

....................

Samson Asaki Awingobit

Executive Secretary