Chairman of Parliament’s Finance Committee, Dr. Mark Assibey Yeboah, has asked Ghanaians to focus on the revenue generation that the Customs Amendment Bill will bring rather than the losses it will incur.
According to him, the benefits largely outweigh the losses as the amendment will boost the Ghana Automotive Manufacturing Programme which has so far attracted several car assembling plants into the country.
Speaking on Eyewitness News, he said that though it will cost the Ghanaian economy an estimated revenue loss of GHS802 million over the next three years, the country will gain in the long term.
“You have looked at the loss side. But you have not looked at the revenue generation side. Volkswagen, Toyota, and four other automotive assembling plants seek to set up here in Ghana and they are going to create jobs. When they set up their base here, we are going to rake in taxes from them. At this point, we haven’t estimated anything. We are only looking at the revenue loss, but on the whole, we seek to gain,” he said.
Parliament on Thursday ,12th March, 2020 passed the Customs Amendment Bill.
The Bill bans the import of used vehicles of more than 10 years and the import of salvaged or accident vehicles.
The amendment was to provide incentives for automotive manufacturers and assemblers registered under the Ghana Manufacturing Development Programme.
Ghana’s Automotive Development Policy
Ghana has put in place an Automotive Development Policy to provide the necessary framework to establish assembly and manufacturing capacity in Ghana.
Toyota, Suzuki, Volkswagen, Nissan and Sinotruk are the major automobile companies with an interest in Ghana.
These firms are going to face stiff competition from the second-hand car market.
The Ghana Revenue Authority (GRA) Customs Division notes that between 2005 and 2016, more than one million vehicles were imported into the country; representing an average of 100,000 cars per year.
Out of the total fleet of vehicles imported within the period under review, 80 percent are said to be second-hand vehicles.
However, the Akufo-Addo administration is hopeful that the Ghana Automotive Manufacturing Development Programme will boost employment and offer an import substitution and export promotion to improve the balance of payment.