EOCO Swoops On Hotels…To Save Fallen Cedi

Hotels, shops and other service providers operating in Ghana and continue to charge in currencies other than Ghana Cedi will have some explanation to do to officials of the Economic and Organized Crime Office (EOCO).

EOCO will, effective Monday, February 24, 2014, begin an exercise to enforce the Bank of Ghana’s directive, banning the pricing of goods and services in foreign currencies in the country.

A task force will undertake inspection of hotels, Forex Bureau, shops and all other bodies that quote prices in foreign currency in the country.

The local currency has been in a free fall over the past few months against all foreign trading currencies. Part of the problem has been attributed to the dollarization of the Ghanaian economy, such that prices of goods and services are preferably quoted in dollars.

As part of measures to save the Ghanaian economy and the falling local currency from a further decline, the Bank of Ghana has directed that all transactions in the country should be conducted in Ghana cedis.

To this effect, the BoG revised its rules governing the operations of Foreign Exchange Accounts (FEA) and Foreign Currency Accounts (FCA) with effect from February 5th, 2014.

It directed that cash withdrawals over the counter from FEA and FCA shall only be permitted for travel purposes outside Ghana and shall not exceed US$10,000 or its equivalent in convertible foreign currency, per person, per travel.

Furthermore, foreign exchange purchased for the settlement of import bills shall be credited to a margin account which shall be operated and managed by the bank on behalf of the importer for a period not exceeding 30 days.

Again, no bank shall grant a foreign currency denominated loan or foreign currency linked facility to a customer who is not a foreign exchange earner.

The Central bank also directed that all undrawn foreign currency denominated facilities shall be converted into local currency with the coming into effect of this Notice.

However, existing fully drawn foreign currency denominated facilities and loans to non-foreign exchange earners shall run until expiry among other measures.

These rules, the Central bank said, “are intended to streamline the operations of these accounts and bring about clarity and transparency in their operations, as well as ensure compliance with Bank of Ghana Notice No. BG/GOV/SEC/2012/12 dated October 10th, 2012, on the pricing, advertising receipts and payments for goods and services in foreign currency in Ghana.”

“Following directives of the Bank of Ghana banning the pricing of goods and services in foreign currencies in the country, the Economic and Organized Crime Office (EOCO), acting on directives from the Attorney -General ,will be enforcing the ban imposed by the bank of Ghana,” Mr. Mortey Akpadzi, Executive Director of EOCO said, in a statement issued yesterday.

In another development, EOCO, in conjunction with the Ghana revenue Authority will undertake an exercise to investigate, arrest and prosecute all companies and persons who have failed to fulfill their tax obligations.

The initial phase of the exercise according to EOCO, will cover rent Tax, Pay -as-you-earn withholding tax, non-registration and/or failure to collect VAT, failure to file VAT returns with the Ghana Revenue Authority and non-filling of annual returns with the GRA.

In 2001, a final withholding tax was imposed on the rents received as investment income at a rate of 10 per cent.

This was further reduced to 8 per cent in 2006. Though we still have a deficit in residential accommodation, more landlords are converting residential accommodation into commercial ones.