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Customs Laws, Car Importation And Rational Policies To Create Jobs

Customs Laws, Car Importation And Rational Policies To Create Jobs

Sun, 8 Sep 2002 Source: Danso, Kwaku A.

I admire any man who has money to buy a car, who would leave it at home and take a bus to work, perhaps dressed in a suit. Sometimes one has to question the sanity of such a man. In Ghana, of course such a man needs to dry-clean the suits every week and have three handkerchiefs daily.

I don’t know about you guys out there, but I have loved cars since I was a child. In fact the fascination of cars as moving transportation vehicles so fascinated our older people that a proverb was created, translated as “A boy who will buy a car when he grows up starts learning about the price of tires”. For the young, this implies the general need in life to pre-plan in order to succeed (where a car was used as a measure of success). Any news about laws and regulations and duties /taxes and restrictions on cars imported to Ghana raises my attention level. We all have to be true to ourselves. There is not a man or woman I know who was a boy or girl once, who does not include the ownership of a car as part of their success asset portfolio.

The irony of life is that in August 2002, it was reported that a man who sentenced his fellow human beings to the firing squad for owning cars and assets considered “luxury” items, is driving a $100,000 Jaguar car. Ex-Chairman and head of military junta PNDC, and former President, J.J. Rawlings of Ghana claims they were gifts donated by friends. Ghanaians overseas work hard for their money. Can we say the same about our friends and colleagues in Ghana’s parliament and civil service? If these men and women did, one may ask: Why are we still so far behind, and economies like Singapore and Malaysia did so well during the same time after Independence?

Why the Poor Stay Poor

One basic economic reason poor nations stay poor is the over-reliance of their revenue stream on taxation of assets acquired by citizens where the government had no inputs in such acquisition. Such is the case for taxing the personal assets and vehicles of Ghanaians returning from studies or stay abroad. Nkrumah's government imposed no duty or taxes, to encourage Ghanaians to return. In fact our shipping lines, Black Star Lines (which was sold during the Rawlings P/NDC regime) would take these personal assets and accept receive payment in cedis in Ghana. This was so till the early 1970s when original ideas of revenue generation were lost, and desperate measures taken without rationale.

The NPP government seems to be trying to reduce and modify regulations and laws made with little rationale, but let's see the rationale.

In the NewsTalk (www.ghanaweb.com) Dated:09-06-2002 01:54, we read:

”The law on importation of over-aged vehicles has been amended with the introduction of a system of penalties instead of outright ban. The amendment was in accordance with the Customs, Excise and Preventive Service Amendment Act 634, 2002, Mr. Harry Owusu, Executive Secretary of the Revenue Agencies Governing Board said at a news conference on Thursday in Accra. The news conference was called to explain the revision to the CEPS Act 634 on the importation of over-aged vehicles.

Mr Owusu said any over-age vehicle already imported before the coming into force of the Act might now be cleared from the ports upon the payment of relevant duties and taxes in addition to the appropriate over-age penalties under the provisions of the current law. The concession, which, he said, is valid until September 30, 2002, is being granted by the Commissioner under Section 336 of the Customs Management Law, which empowers the Commissioner to issue instructions on any other matters not covered by the law or any amendments.

However, any vehicle which is not processed and cleared by September 30 would be forfeited to the state and disposed off accordingly. Under the current law, a vehicle that remains uncleared within 60 days after the date it was imported into the country would be forfeited to the State. The grace period does not however apply to over-aged vehicles currently awaiting clearance at the ports. Mr Owusu explained that motorcars aged not more than 12 years old would attract a penalty of five percent, those not more than 15 years would attract 20 percent while vehicles aged over 15 years would attract 50 per cent CIF value respectively. He said buses, coaches and vans that were not more than 12 years would attract a penalty of 2.5 percent, those aged not more that 15 years would attract 10 percent, those not more than 15 and 20 years, respectively would attract 15 and 50 percents.

Trucks, lorries and tippers aged not more than 12 years shall attract a five percent penalty, those not more 22 years shall attract 10 percent and those over 22 years would attract 30 percent.

In modern civilized societies, penalties are enacted for breaking laws or regulations made to protect or preserve the society. The penalties on so-called over-aged vehicles were put in place by the Rawlings-Botchwey system on the 1980s and 1990s, where no rationale was given except for the sole desire to punish the people perceived as "having" more than the rest of society.

Importing cars was, for the communist-minded Botchwey at the time, a breach of the "people's law" and ethics of "all-of-us in this poverty together". I recall in 1989 when I was home, the news rumor was of a woman who had imported a Mercedes 190e model. She had to pay 500% duties, some US$45,000 or so at the time. That Kumasi woman paid it, and it was the news of the time! Would any professional who has worked overseas for 10, 20 years be considered "too bourgeoisie" to drive a Mercedes 190e? I leave both the socialist and the capitalists to ponder on that one. I refused to pay the 500% super sales tax on my Video Recorder in 1989, and had to return it to the US. Does owning a Video Recorder in Ghana take money and food away from the mouth of anybody? It is for this reason that I have personally analyzed and put most of the blame of our economic demise on men like Dr. Kwesi Botchwey who faked their way for the better part of two decades and helped to see us to HIPC. I wish we could bring them to court to answer a few questions for us all. Men like this whose lack of understanding of “socialism” has helped put the final nails to the other wise nice concept which former CPP Minister Krobo Edusei described in the memorable words: “Di bi ma me ni bi” (eat and let me eat too).

Skin Pain Politics:

In Ghana we have a name for this age old public policies based on envy. We call them “skin Pain” or “Ahoo yeaa”. Today, Botchwey may be a changed man enjoying the American “elite bourgeoisie life” with all of us here overseas whiles his boss drives a $100,000 Jaguar sport car. Nobody is asking them to face the firing squad yet. Point is that the idea was to "punish" people importing cars more than ten years old and also more than 2,500cc engine size. None of their socialist minds could reason that these returning people had struggled to acquire whatever their money could afford, and to sell a car one had used for say 8 years and know it’s reliability and functionality, was a loss on their limited budgets. They could not afford newer ones, and that is why they were bringing in the old ones. I met two young medical doctors like that in 1992 who were returning from a course in Britain and had managed to go to the continent and purchase and ship their 9.5 years old cars with all their savings. They were very happy about it. What is wrong with a medical doctor owning a car? Are these doctors stupid enough to buy cars they know would be useless within a short period of time? I challenge anybody to compare the mechanical and body integrity of their so-called “newer” cars in Ghana with a ten year old BMW or Mercedes in the US.

The POINT and fact is that there was no Scientific or Engineering reason given for these laws that the PNDC put on the books. They were done in as irrational a way as Jerry Rawlings just made a statement in 1979 banning all cars into Ghana except six models (Fiat, Opel, Vauxhall, Nissan, Mercedes, BMW). Toyota had not been included because the dealer at the time, as reported, had been a Lebanese businessman who was considered "arrogant" by this once-brutal dictator who now parades our streets as nobility enjoying freedom of speech.

Irrational Policies and Effects:

Every society pays the price or wins the rewards of policies made by their leaders. One can bet anybody that half of our economic woes are due to irrational decisions and policies made by men who had no clue as to wealth generation, job creation, and how they correlate to business. The other half may be due to our poor social and work ethics, cultural habits, all of which can still be changed and shifted by the right leaders. A look at the Singapore situation and how they reached First World status starting from the same level we were in the 1950s will reveal the point. It shows how the former Prime Minister Lee Kuan Yew and his ministers negotiated between the Multi National Corporations (MNCs), and their unions, to reach a fair “win-win” balance. One side does not have to resort to words like "exploit" or "cheat", as we normally find ourselves using later on after we negotiate with the MNCs. There are many contracts that can be renegotiated even after many years, if there is good will on both sides. This is how I view the Kaiser Valco –ECG contract.

Any government where policies and regulations are made without hard core rational based on the effects on the people and society, are bound to create animosity. For example, one can justify the ban by such known environmental effects as pollution and poisonous gas emissions. However, in Ghana, no such correlation was made. Correct policies can help create jobs whiles they monitor such things as pollutants.

Creating Jobs with Policies:

In most states in the US, starting from California, cars are now required to have smog control emission check every two or so years before registration. This has created many jobs for Gasoline (petrol) station owners and manufacturers of auto emission inspection equipment throughout America. In other words, a policy that is to protect people ends up creating jobs.

In Ghana /Africa where policies are made without the effects on the economy and people, by the whims of some administrative lord, such rational thinking does not occur. A good example was when a few years ago the Police Commissioner announced the banning of the tinting of vehicle glass windows. Tinted windows could be used to hide crime, they reasoned. It was rumored the girl friend of the Police commissioner was found taking a ride in a tinted car of another man.

My God!! What a crock of an excuse!

Scientifically it has been found that the direct rays of the sun causes skin cancer, mostly in white skins, but also even in our own dark skins. Tinted windows cut down the ultra violet rays from the sun that cause this cancer. In addition the reduced sunlight creates a shade and comfort, and in cars with air-conditioning, help conserve petrol used to power the A/C. There is a good scientific reason to tint all windows if we can, especially windows for public buses and passenger vehicles. One could conserve some 3-10% fuel nationwide by this energy reduction alone. In addition to that Ghana plastic manufacturing companies could help create tons of jobs by manufacturing these thin film tinted plastic for cars as well as for house windows. This is currently done in the US, where House Windows are rated by E-Factors. The current fashion trend is a Vinyl Frame Window with less conductivity that Aluminum frame, and rustproof in humid climates, double paned glass, also tinted. The better the energy design the higher the E-Factor. This is how jobs are created with policies of smart and savvy leaders and administrators.

The Sad History and The Future Ghana:

The sad thing about our society is that men and women making policy today are the very ones who did not appreciate Science and Mathematics in Secondary Schools during the time we were in school in the 1950s to 1970s. As such some policies made lack basic understanding and appreciation of Science, and how that even affects business and hence job creation. It is for this reason that we should make every effort to teach, as part of the basic core courses for our secondary and tertiary education, subjects such as basic Mathematics, Science, Business Accounting and/or Economics, Introductory (Business) Law, as well as the traditional English, French and others. The current changes in duties as reported is a start. I am still not happy with arbitrary vehicle ages without any tests and monitoring of smog control on these vehicles that pollute our streets and nice air. At least they start to bring the duties and penalties within reason, but the question is:
  • Are they based on any Scientific rational?
  • Won't the smog control inspection system rather help our nation and people? Wont such a policy help create jobs?
  • Can we negotiate and /or finance some Engineers and entrepreneurs to manufacture smog control inspection equipment and services?
  • Can we finance any of our entrepreneurs to manufacture spare parts in Ghana?
Are we there yet?
Just a thought of things yet to come.

Views expressed by the author(s) do not necessarily reflect those of Ghanaweb.
Columnist: Danso, Kwaku A.