Business News Thu, 7 Sep 2017

Traders kick against excise stamp policy

Traders’ associations across the country are up in arms against government over the implementation of an excise stamp policy which they argue will lead to an increase in their operational cost.

Not only are the associations fighting the implementation of the policy, but are accusing the Finance Ministry of not consulting them enough before passing the Excise Tax Stamp Act, 2013 (Act 873).

The controversial Act was passed in 2013 with the aim of applying a special hologram to products that attract excise duty in order to prevent tax evasion.

The policy, which was to begin last year, was suspended when various traders’ associations rejected it and asked the previous government to engage them for their inputs as it contained clauses that will impact negatively on their business.

But, the current government, last week, without recourse to the traders’ associations, launched the policy, which it argues, will ensure tax compliance and help generate more revenue.

The implementation is set to begin with government absolving full cost of affixing the stamps for the first six months, and half of the cost from June to December 2018, and then finally, wean itself off and transfer the full cost to the traders thereafter.

But Benjamin Yeboah, Executive Member of the Ghana Union of Traders Associations told the B&FT they are against the move.

“When we read the Act, we realized that if they had sought our inputs, we will have a more properly crafted Act than it is now. Per the law, we are talking about things like carbonated drinks, tobacco, canned foods, bottled water, non-alcoholic beverages, among others.

Even though there are not many items captured under the Act, it still gives the privilege to the Finance Minister to add on.

“Imagine you are importing those items, once the items get to the port and you have paid the requisite duties, levies, taxes and all that, you still have to move those items to a specified location within the port. These items will be again offloaded from the container and then the tax stamp affixed on them. Our problem is that who is paying for the stamps?

The Finance Minister has said that they will give the tax free, but it will eventually become the expenses of the importer to pay for those tax stamps.”

Also, Executive Secretary of the Importers and Exporters Association of Ghana, Samson Asaki, complained about the cost of infrastructure for the policy, saying, it is too expensive to implement by manufacturers and importers.

“We have serious concerns about the excise stamps. In the case of manufacturers, we understand that the cost of acquiring the machines to affix the stamps on the products is about half a million Ghana cedis thereabout. And for importers, there is a hand-held one that we also understand cost US$5,000 thereabout. How can we afford this?

And again, the cost of the tax stamps themselves is a problem. They say it will be free for the first six months, and they will take half after six months, and after a year, they will push it on the importers to bear it. If you [government] wants to collect your revenue, why should the business community bear the cost? You have to bear the cost on your own to get your money. So, we are not against government, we just have concerns,” he said.

Deputy Finance Minister, Kwaku Kwarteng has, however, reiterated that implementing institutions will not hesitate to crack the whip on any business which fails to abide by the directives when the programme is fully rolled out.
Source: thebftonline.com