Shippers wait scrapping of 2.1% Special Import Levy

Maritime sector actors say they cannot wait for the new government to scrap the 2.1 percent Special Import Levy (SIL), as well as the other tax cuts it promised, as they seek enhanced operating environment at the ports.

Chairperson of the Greater Accra Regional Shipper Committee (GARSC), Adobea Asiama-Aboagye, told the B&FT in an interview that: “The new government promised tax cuts; and for those of us in the shipping sector, we expect that the Special Import Levy will go.”

Executive Secretary of the Importers and Exporters Association of Ghana, Samson Asaki Awingobit, also said: “If government is able to implement what it promised to do for the sea trade sector, it will significantly empower businesses in the dominant economic area and that will trigger national socio-economic growth.”

Government introduced the Special Import Levy in July 2013 as a “stop gap” tax on specialised imports to the country in an effort to raise revenue to support shortfalls in the 2013 fiscal budget year.

Although the levy was supposed to be in place for three years—which means it should have ended in 2015— it continues to be applied, and shippers say they cannot continue to endure its harsh business implications.

The blue economy is a critical economic area that provides thousands of jobs and rakes in huge revenue to the national kitty, with ongoing expansion works at the Tema Port expected to engage 5,000 new hands.

According to the 2016 Oxford Business Group (OBG) Report, combined throughput at the country’s ports exceeds 17m tonnes per annum (tpa) and transit cargo has reached over 800,000 tpa, an increase of over 40% since 2010.

Also, the country’s primary ports, Tema and Takoradi, now handle over 900,000 twenty-foot equivalent units (TEUs) every year.

Industry players have also welcomed President Nana Addo Dankwa Akufo-Addo’s decision to set up a special ministry to develop the country’s rail network.

According to the GARSC boss, the establishment of a railway ministry is in the right direction as it will help reduce the cost of business in terms of haulage.

“We pay a lot in transporting cargo from the port to the hinterlands, but of course, if we have a running rail network, then it is going to be cheaper for exports.

An efficient rail transport system will ensure smoother and faster movement of cargo at the ports.

When you come to the port area, several terminals have been given for trucks to be parked, and this seems to be a nuisance but that is what is at stake…”

According to Mr. Awingobit, the Ministry of Railway Development is a prudent and important decision from government, as it will give due attention to the development of an efficient rail transport system.

“Ultimately, this will reduce the cost of doing business at the port, specifically when it comes to movement of cargo from the port to inland destinations.”