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20.04.2019 Business & Finance

GUTA, AGI 'Lock Horns' Over Reduction Of Import Duties

By Staff Writer
Seth Twum-Akwaboah (L) and Dr Joseph Obeng
APR 20, 2019 BUSINESS & FINANCE
Seth Twum-Akwaboah (L) and Dr Joseph Obeng

“I think that we need to really think through it very well. Because …applying 50% reduction on all goods, is problematic. Because if we look at the CET [ECOWAS Common External Tariff], the CET has different tariff bands to take into account certain industries within the sub-region – that we have some local capacities to produce those products and therefore they need to be protected a bit.

“There are those that we don’t have local capacities at all and therefore if you raise the tax so much you are only making the product expensive in your market. So they took all those things into account in setting the tariff bands,"AGI Chief Executive, Seth Twum-Akwaboah.

According to him, flat rate application of the tariff reform runs counter to government desire to encourage local production.

“Imports will become much cheaper than manufacturing and the implication is that those who are producing, those who are making the business of manufacturing in the country and employing people will turn into trading,” he said.

When manufacturers become traders to benefit from the import tariff reduction, the economy will suffer he said.

But GUTA President, Dr Joseph Obeng disagrees arguing that the benchmark value reduction is not limited to finished goods only.

“It goes right down to raw materials. So the status quo remains the same. If you want importation to banned, you should be bold and tell the government that ban importation, but can it be done? It can’t be done because importation is very necessary. It is only helping what we locally generate.

“It is not possible to manufacture everything, you have to see where you have a competitive edge and produce it. The rules must not be bent for you alone,” he advised.

Government recently introduced that the benchmark value of import duties slashing it by 50 per cent, while that for vehicles alone has been reduced 30 per cent.

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