09.02.2006 Feature Article

Import Duty Assessment On Cars

Import Duty Assessment On Cars
09.02.2006 LISTEN

– Our Government Greed Makes All Ghanaians Lose. Fellow Ghanaians,

I wanted to let this class action law suit lie idle for some time till we had enough people with their paperwork and ready to pay the Attorney's fees. However I received a letter today that makes me react again (I hide the identity of the writer). From: [email protected] [mailto:[email protected]] Sent: Sunday, February 05, 2006 2:22 PM To: [email protected] Subject: import duties in Ghana Hi Mr. Danso

You recently published some articles about the import duties fiasco in Ghana especially on cars. It first seems that the government was going to do something about it but the problem still lingers. I wanted to send a vehicle home, now the vehicle itself is worth $7,600.00 USD but guess how much it will cost me in duties in Ghana, $8.700.00 USD base on 34.5% duties levy. I am not saying that I should not be charged duties I just want them charge the duties base on the vehicle's current worth not base on its price at the time of manufacture. Could please publish a rejoinder to your article on the subject again, please, please, if I may be of any help, do reply. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Dear xxxx, Thanks for your mail.

We need to work together and use the rule of law to stop this nonsense of over-taxation of those who are supposed to be the “haves”. Ghana is losing a lot of potential jobs because damaged or salvage cars is now a big business going to some third world countries where labor is cheap. In one unplanned shopping, I picked up an insurance company salvaged 1998 Mercedes for only $3,700 at an auction in December 2005 when I accompanied my nephew to find a car. I decided to pay to have it repaired here in California instead of go through the hassle of sending it to Ghana. The work was completed last week and if I did not tell anybody, they could not tell it was not a new car! If I had shipped this to Ghana and paid say $500 to government [which my friend from Afghanistan told me they pay when they ship such cars], it would provide a job for say 5 mechanics [and parts salespersons] in Ghana. Multiply that by 3,000 vehicles per year and you have 15,000 people employed and 3,000 doctors or other professionals who would be happy to be able to afford a nice decent car. The government collects $1,500,000 [$500 x 3,000]. As our system is now, government gets nothing! Zero because this industry is stifled by our governmental greed!! Professionals in Ghana are unhappy with their salaries; our oil refineries are virtually being run and sold to foreigners, just as the other state owned enterprises (SOEs). And the people in the car repair, body work, car paint business, auto sales people, all lose! Our uncles in leadership have disappointed all of us! Common sense is not common anymore!

Owning a car should not be regarded as “for the rich only” any more, but for every middle class person. Anybody who has completed a University or technical school beyond Secondary school deserves to and should be paid enough to be able to afford a car! In the example above, if I had shipped the car for say $1,500 and paid $500 to government and made a small profit of $1,000, the new-looking Mercedes would cost $6,700 [$3,700 +$1,500 + $500 + 1,000]. At a financing rated of say 15% for 60 months, the car payment would be $159/month. Most managers, professionals, university lecturers in Ghana can afford that. With the current government system as it is where values are determined from a book irrespective of negotiated price, the duties on the car would be an additional $8,000, leading to a price of $14,700. The monthly car payment for a 60 months financing at 15% modest interest will be $350/month. The later is beyond the means of most people, including even Ministers. Ghana was never like this when some of us were growing up! In the 1960s Secondary school teachers were able to afford cars. Today, medical doctors, engineers and accountants are not able to afford a car on their bare income alone unless they make some deals [another name for corruption]. This has turned even decent professionals into thieves who would not mind robbing supplies meant for hospitals or schools, or tools and supplies for a government contract job. Why? It is because of the GREED of a few in our government. The only logical conclusion one can draw is that this group in government were not creative enough to solve the inflation and economic problems starting in the 1970s! Robin Hood taxation is their answer to social income distribution! It is a lose-lose for all!

I offered to lead the class action law suit through GLU but we don't want to take money from external financiers on this one, but ourselves. We need to learn to stand on our own for what we believe in. Some of the Ghanaians who have never gone through this don't feel the pain until it gets to them, and a couple of people are even criticizing that we don't have to sue government. As an organization of people, I am afraid we are not learning from those ahead of us and from the mistakes and lessons from other nations. Hence we have an impeded growth in organizational knowledge. Ghana Leadership Union found a lawyer to file a class action law suit, and the cost was C18 million (only $2,000). So far not many people have offered to share in the cost. One or two of us don't want to bear this burden alone since after all, if we were to look at it in individual personal basis, we have already paid our dues. I paid C140 million on 2 vehicles, and I don't need to ship another car. BTW I know some Ministers in the government who went through this pain also, but once in government, their duties on cars may be free, and/or they get free government paid cars or car loans which they don't pay back [Now you know why it is reported to cost so much money to get a nomination of any ruling got s Parliamentary seat! (smile)]. I initiated this class action law suit to set precedence for our democracy, for people to stand up for their right against unfair taxation using the courts. That is the essence of democracy! In this case it is unfair assessment of vehicles, which ignores the original sales price. The benefit is for the generation behind us. People need to pay a little for their rights! We need to make sacrifices for our future, and not think only of ourselves for today, but instead for a better Ghana under fair and equitable taxation. We need to remove this Botchwey's Robin Hood taxation bequeathed to the new government [which the NPP also don't want to change]!

BTW, I have not given up yet, and as soon as I get a commitment of about 10 people willing to pay $200 each or 5 willing to pay $400 each, we will file. Lawyers need to make some income! (smile). I am not a superhero, and my last name is not Gates. I work for my living just like all of us and my time in fighting for our society, plus moneys to set up GLU will be my contribution if the younger ones want to continue. Please stay in touch and if you want to join our discussion forum, write to [email protected] Better still send in your commitment for the law suit.

Cheers, Kwaku A. Danso, President, Ghana Leadership Union, Inc. (NGO) Fremont, Ca.94539, USA /and East Legon, Accra, Ghana Views expressed by the author(s) do not necessarily reflect those of GhanaHomePage.