Spare parts dealers
Parliament yesterday passed the Customs (Amendment) Bill, 2017, paving the way for import duties to be removed from selected vehicular parts, as agreed by spare parts dealers and officials of the Ministry of Finance after extensive consultations between the two parties.
In line with the government’s promise to scrap import duties on spare parts as contained in the 2017 budget statement, majority New Patriotic Party (NPP) Members of Parliament (MPs) argued strongly during the consideration of the bill that the passage of the bill would bring relief to consumers of spare parts and also stimulate growth in the domestic transportation sector by making it relatively cheap and easy for vehicle owners to maintain their vehicles to reduce road accidents.
The new amendment bill that sought to amend the Customs Act, 2015 (Act 891) specified categorically that car tyres are not covered under the new bill and that they would still attract import duties.
The removal of the import duties would affect both new and used vehicular parts and so importers and consumers of both new and used vehicular parts would benefit from the tax exemption.
The President is expected to assent to the bill passed by Parliament soon.
The Minority National Democratic Congress (NDC) Members of Parliament, however, argued that the bill is very populist, deceptive and does not represent the actual promise made by the ruling government to remove taxes on spare parts imported into the country.
The ranking member of Finance and NDC Member of Parliament for Ajumako/Enyan/Essiam, Cassiel Ato Forson, who contributed to debate on the bill during its second reading on Tuesday, said the ECOWAS Common External Tariffs (CET) Secretariat has given Ghana only four years of exemption for taxes and that by 2021, government would be imposing import duties on spare parts again.
According to the ranking member on finance, spare parts dealers have been made to understand that all taxes on the importation of spare parts have been removed, but that is not the case as importers would be asked to pay Value Added Tax (VAT) and National Health Insurance Levy (NHIL) on those goods.
The NDC MP for Wa West, Joseph Yieleh Chireh, said the government must not create any confusion between spare parts dealers and consumers, asking government to clearly come out with a list of all vehicular parts that are to be exempted from tax.
The minority leader, Haruna Iddrisu, said that there is still ambiguity in the definition of spare parts and the actual vehicular parts that are to be exempted from taxation, arguing further that car tyres could also be described as spare parts since they are also changed regularly and are part of the ‘whole’ motorized vehicle.
The MP for Lower Manya Krobo, Ebenezer Okletey Terlabi, said he would only support the bill if car tyres are included in the list of spare parts to be exempted, otherwise it would be an unfair and discriminatory law.
The chairman of the Finance Committee, Dr Mark Assibey-Yeboah, who presented the committee’s report, said the Ministry of Finance has not made any forecast for revenues that would be accruing from import duties on the spare parts in question in 2017 but added that for the first quarter of 2017, the government realized GH¢30,441,159 as revenue from the affected taxes.
He said for whole of 2016, the government realized an amount of GH¢97.5 million from import duties on spare parts and that the government could be losing between GH¢90 million and GH¢100 million every year from the exemption, which more than compensates for the general reliefs and comfort the exemption will bring to Ghanaians.
The MP for Berekum East, Dr Kwabena Twum-Nuamah, lauded the removal of taxes on spare parts and added that the exemption will eventually trickle down to the pocket of every Ghanaian since transport cost would be reduced and food prices could also be reduced while transport users would save for other needs.
By Thomas Fosu Jnr