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28.06.2005 Business & Finance

Wax Print importers up in arms

Importers of Chinese wax prints into Ghana are at war with the government over what they describe as the astronomical increases in import duties and other taxes on their goods.

While the government has explained that the move is part of measures to protect the local textile industry, the importers are of the view that the move is to throw them out of business.

For instance, while the Free On Board (FOB) of a quantity of 198 bales of Chinese imitation wax print imported on May 23, 2005 was $62,964, the FOB for the same quantity of imported wax print on June 9, 2005, was $365,528.

The Cost Insurance Freight (CIF) for the same quantity in May was $65,532.43 as against $368,726.37 when the import duty went up from $13,106.49 to $73,745.27.

With regard to Value Added Tax (VAT) and National Health Insurance Levy (NHIL), the figures rose from $9,829.86 and $1,965.97 to $55,308.96 and $11,061.79.

In an interview, Mrs Regina Acolatse of Gelina Enterprise said these increases had made it difficult for some of the traders to take delivery of containers because they do not have the needed funds to clear the items.

She said importers from China paid their taxes and did not understand why the government was directing the frustrations of local textile owners at those who paid their taxes.

Mrs Acolatse said the government needed to take drastic measures against the smugglers and not those who paid their taxes and that the low prices at which they sold their wax prints were to make it affordable to everyone.

An official of the Ministry of Trade and Industry said the imposition of the tariff barriers was to avoid the dumping of imported wax on the Ghanaian market and pointed out that the measure was part of the World Trade Organisation (WTO) and European Union (EU) policy measures to protect local industries.

According to the source, any time imported textile sold cheaper than those manufactured locally, the government was empowered by the WTO rules to impose some tariffs to avoid a situation where the country became a dumping ground for cheap imported materials.

The source said everybody was aware of the difficulties that imported cheap wax prints were causing to the local industry.

According to the source as a developing country, the government could not sit down unconcerned and allow local industries, some of which had already closed down to cause mass unemployment.

The source allayed the fears of importers of local materials that the policy would enable the local industry to compete.

Sources at the Customs, Excise and Preventive Service (CEPS) corroborated the explanations offered by the Ministry of Trade and Industry and said stakeholders in the textile sector met to deliberate on the harm the cheap imported textiles were causing to the local industry.

They said it was detected that some of the importers connived with the suppliers of the textiles to doctor the value of the wax prints, thereby attracting excessively low duties.

They contended that about 200 per cent increase in taxes should be imposed on such imports otherwise they would destroy the local industry.