Tax hikes of over 1500% to affect seafood imports

Government will increase import taxes on frozen seafood by 1,573 percent from the current GH¢15 to about GH¢251 per metric tonne, the United States Department of Agriculture (USDA) has said in its second quarter foreign agricultural service report.

The tax, the USDA said, will be paid in US dollars – which are in short supply. The tax hike, according to the Department, could cut imports and cause fish supplies to reduce on the local market.

Elimination of the benchmark value discount policy and increase in Value Added Tax (VAT) are some other challenges that have the potential to affect imports of seafood trade in the country.

Indeed, these taxes are already making doing business in Ghana’s major port of Tema unattractive to importers, especially with the current economic situation.

The report indicated that due to these tax measures, vessels prefer to discharge at neighbouring countries such as Togo and Cote d’Ivoire then truck over the border tax free.

Despite the taxes, rapid growth in the country’s hospitality industry in general and the food services sub-sector in particular are some reasons the sea-foods will continue to remain attractive to importers.

Ghana is a net importer of fish and seafood products. In 2022, the country imported approximately US$145million worth of seafood – down 13 percent from the US$164million in 2021.

The top-three seafood-supplying countries to Ghana in 2022 were Mauritania (US$37.2million), followed by China (US$18.2million) and Morocco (US$16.6million).

Faroe Islands, Spain, Norway, South Korea, Netherlands, Angola and Singapore in that order form the other top-ten seafood supplying countries into Ghana

The United States was the 13th-largest supplier of seafood to Ghana with a value of US$4.2million, up 42 percent compared to 2021’s value of US$2.9million.

The most common fish species imported into Ghana include mackerel, sardines and whiting/hake.

Seafood is an important staple in Ghanaian cuisine, as it accounts for 60 percent of animal protein intake with an estimated per capita consumption rate of 26 kilogrammes – one of the highest rates of dependence on fish for nutrition on the continent in terms of per capita consumption.

U.S. seafood sales to Ghana recently experienced a boost; however, sustained seafood exports from the U.S. are at risk due to recent announcements of increasing the tax by 1,573 percent per metric tonne on frozen seafood.

However, a similar report by the USDA last year indicated that Ghana’s seafood market presents an excellent opportunity for U.S suppliers in the long-term, if nothing is done to prioritise and augment domestic production.