Cement Importers Dodge Tax

The local cement manufacturing industry is under serious threat, as importers of the product adopt underhand dealings with the active connivance of public officials in the corridors of power and regulatory agencies.

The absence of strict application of the rules governing the import of such finished products into the country has contributed to windfall profit margins for these companies, which do not go to the state in terms of taxes, BUSINESS GUIDE has found out.

This has been corroborated by an anonymous staff of one of the regulatory agencies.

It has been discovered that the cement importers, smart as they are, bring in a bag of cement at the cost of about GH¢8 and sell same at about GH¢26 depending on their networking with bad elements in public agencies.

Even more intriguing is how they are able to evade the payment of the appropriate duty and the VAT elements due the state, a negative development which is costing the state a whopping amount of money annually.

It remains one of the major yet talked-about sources of financial hemorrhage to an already cash-strapped economy.

BUSINESS GUIDE has established that the local producing companies pay more to the state kitty than the importing ones even though they employ more Ghanaians than importers.

A top official of the Ghana Revenue Authority (GRA) discreetly remarked that 'these companies, which had devised and perfected their cheating ways, were harming the country's economy and the earlier something is done about them the better.'

The official said that 'at the appropriate time the names of these companies would be made public and the amount of money due the state made public.'

The revelations are coming on the backdrop of news about the state losing over GH¢36 billion through fraudulent activities of unscrupulous importers, including those bringing in bagged cement.

The revelation about the lost revenue is said to have ruffled the GRA, whose efforts to stem the revenue hemorrhaging activities of bad businessmen, are not yielding positive results.

BUSINESS GUIDE has gathered from investigations that measures put in place to ensure that the state ropes in maximum revenue from imports have been unsuccessful.

Prominent names in the industry or Local Cement Producers (LCPs) include the Diamond Cement, Savannah Cement, Western Diamond, Dangote Cement Company, West African Cement Company and Heidelberg Cement, whose subsidiary company is the Ghana Cement (GHACEM).

President John Mahama recently inaugurated another producing plant in Buipe in the Northern Region which would use limestone deposits in the general area for the production of cement.

Following an earlier petition by Local Cement Producers (LCPs) to the Trade and Industry Minister, Ekwow Spio-Garbrah, about the negative effects of cement imports, government gave an assurance that the issue would be addressed and subsequently directed the Tariff Advisory Board to probe the issue.

Nothing has come out of this and the LCPs are concerned.

The Strategy and Corporate Affairs Director of GHACEM, Dr George Dawson-Ahmoah, who is also the Coordinator of the LCPs, said the influx of imported bagged cement on the Ghanaian market has affected the sale of local cement.

An efficient management of the challenge, he observed, would secure the LCPs to create more employment for Ghanaians.

The LCPs, he noted, have the installed production capacity to meet the increasing demand for cement in the country.

He recalled how the local steel, textile, and aluminium industries have suffered similar fate in the face of the importation of their products.

The assurance of government to address the problem is yet to materialise even as the LCPs reel under the unfair competition from sub-standard bagged cement from abroad.

Cameroon has banned the import of cement, a development Dangote, one of the continent's leading producers, is taking full advantage of.

By A.R. Gomda