Second-hand vehicle, auto parts dealers push for review of ‘discriminatory’ up-front duty payment

Used vehicle and auto spare parts importers in Kumasi are calling for a review of the upfront payment of duty, describing it as discriminatory.

They say the policy threatens the survival of indigenous businesses to the advantage of their foreign counterparts.

Their call was made when officials of the Customs Division of Ghana Revenue Authority (GRA) engaged the importers in Kumasi to trash out challenges in the business.

Secretary of the Used Truck and Spare Parts Importers Association, Nyaaba-Aweeba Azongo, explained that import volumes have dropped significantly as a result, with consequences for government revenue.

“Our petition against the discriminatory application of the upfront duty policy regime, in favour of foreign vehicular dealership, is threatening the very survival of the indigenous industry.

"We are by this petition calling on you to humbly request an urgent audience with the relevant government authorities to resolve a common recourse to a post duty sale regime,” he said.

He continued: The deficiencies in this upfront policy regime as applied to our industry is rather at cross-purposes with the object of the policy to improve the prospects government revenue.

"The upfront duty policy regime on our members is a major locked –up capital challenge to the indigenous business, which has in effect reduced significantly the volumes of importation and consequently affects the general volume of revenue that would have accrued to the government."

Bonded warehouses

Increasing invasion of the spare parts business by foreigners, the local players say, evade tax due to weak border controls.

They say the fraudulent manner in which these businesses are carried out, without proper checks and duties could collapse the businesses of our members in the few years ahead.

Mr. Azongo has suggested the state to establish bonded warehouses for used vehicles to address the huge cost of operations.

“We need the establishment of a bonded warehouse for the mutual benefits of government, and the used trucks and spare parts importers dealership”.

Hedge duties (fixed rate)

The group is also calling for a policy to hedge the duties (fixed rate) against currency depreciation to lend some stability in the payment of duties.

This, they believe will minimise the extortions in the delivery and transportation chain of their containers.

“This current move measures the degree of discontent amongst our members and the result of the institutional communication gap between government and we the major players in the industry, it is our hope that this basic requirement of policy engagement with the primary stakeholders will not be side-stepped in this manner as obtains in our case,” he said.

Ultimatum to address grievances

The group has given government up to the month of March, this year to address their concerns which they have put in a petition delivered through the Customs boss.

“We are thus calling upon your high office an urgent meeting with relevant stakeholders not later than March 2019 to address the issues raised in this petition.

"We are of the deepest conviction that this would set the stage for an effective partnership to ensure that our interest is taken on board as required to enable the Association to respond to the immense interest and demands of government in this sector.”

Commissioner for CEPS, Isaac Crentsil, advised the importers to form a stronger national body to seek redress to their grievances.

“You must come together in a strong union or association so that if the government wants to deal with your challenges or grievances it can be done easily,” Mr Crentsil said.

The need for state facilitation of speedy clearance of goods at the port to reduce cost was also highlighted.