Revenue Continues To Leak

President John Mahama

President John Daramani Mahama has been in office for a few months but if he intends to garner enough resources to fulfill various promises he made, then he will have to move swiftly to block the revenue leakages in the country.

This is because government continues to be short-changed regarding revenue it is expected to accrue from the importation of certain products into the country.

This paper's investigations have revealed under invoicing regarding the importation of Don Simon, a fruit juice product that is widely marketed in Ghana.

What is however not clear to this paper is why the Destination Inspection Companies (DIC) that are duty-bound to keep these activities in check continue to look on while these leakages happen.

Documents in possession of this paper contain worrying degrees of under-invoicing regarding the importation of Don Simon into the country.

This practice has enabled the importer to sell their products at prices far lower than the cost involved in importing the product.

The total cost of a Don Simon, which these companies are showing in their declaration including transport to warehouse charges come to only GHC 13.07.

At a US Dollar rate of 1.9427, a carton of Don Simon costs GHC 9.06, attracting duty, VAT and other charges as per declaration of GH¢3.75 while the landing cost of a carton of that same product stands at GH¢12.82.

Transport charges for a 20-inch container from the Tema Port to Accra stands at GH¢450 making a carton cost GH¢0.25 per the 1800 cartons in a container while the cost of the product at a Custom Bonded Warehouse puts a carton at GH¢13.07.

The above calculation adds up to 13.07 but importers sell their products at GH¢27 and GH¢30, which implies that they make 100 to 129 per cent, a margin that is hard for this paper to accept.

Our investigations reveal that the importer of the product failed to declare the right value of the invoices they used in purchasing the product and that the DICs involved in the inspection overlooked the matter.

These nefarious activities enabled the importers to milk the state while making it impossible for local producers of fruit juice to compete favourably on the market.