Business News of Friday, 3 March 2017
Spare parts dealers at Abossey Okai in Accra have pledged to reduce the prices of their goods owing to the removal of taxes on the importation of automobile spare parts into Ghana.
Minister of Finance, Ken Ofori-Atta, made the announcement yesterday in Parliament while presenting the 2017 budget.
The spare parts import duty was introduced by the erstwhile National Democratic Congress (NDC) administration.
According to Mr. Ofori-Atta, although the spare parts import duty and other taxes such as the 1% Special Import Levy, Kayayei market tolls, 17.5% VAT/NHIL on financial services, among others, were introduced to raise revenue, they have proven to be unprofitable means of raising money, which has rather become a burden to the business community.
“A number of tax measures have been introduced in recent years in an attempt to deal with revenue shortfalls,” he said.
The Finance Minister added that “some have proven to be nuisance taxes. They have no revenue yielding potential, and at the same time impose a significant burden on the private sector and on the average Ghanaian citizen. As part of our commitment to re-energize the private sector, the government has decided, as pledged, to review these taxes to provide relief for business. ”
A few minutes after the Finance Minister made the announcement, scores of spare parts dealers poured onto the streets at Abossey Okai, the hub of spare parts trade in Ghana, to celebrate the news of the abolishment the import tax.
They said that the removal of the import tax would bring great relief to them, pledging to subsequently reduce their prices.
Vincent Owusu Antwi, owner of Supply Innovation Limited, dealers in Nissan and Toyota Parts, and one of the jubilant dealers, told BUSINESS GUIDE that existence of the import tax has been a major burden on traders in the spare parts business.
“When you add the cost of the spare parts, the freight and the duty, it makes the prices very high,” he said.
Mr. Antwi, who was beaming with smiles during an interview with the paper, indicated that “but now import duty on spare parts has been abolished, we are going to cut down the prices of spare parts in the market, and it is going to be very affordable for car users to buy so that’s very good news for all of us as Ghanaians.”
He added that “it’s going to help the market as well to boom up because if the spare part now is cheap and you need to replace your parts I don’t think it’s going to be a burden for the public. When the tax is removed, the prices are going to start going down instantly, he said.
“It will make us to reduce prices for customers,” Bismark Agya, one of the dealers said.
Owner of Geobrite Enterprise, George Baah had this to say to this paper: “Every trader expects such a huge impact on our business. As a businessman, if I import goods from foreign country, I expect the government to help me in terms of duty so if government announces such a programme it’s a good opportunity for us.”
Mr. Baah said that “the duty always affects our prices of goods, because when you import goods and you have those huge duties, they increase the prices. Government should be proactive in addressing issues that are adversely affecting the growth of the economy.