Abbosey Okai Spare Parts Dealers Association has rejected the view that dealers have an alliance with the New Patriotic Party (NPP) government and antagonize its main rival, the National Democratic Congress (NDC).
Chairman of the association Joseph Paddy explained as business group, their main concern is how governments help them stay in business.
“We think the NPP is more business friendly …even if NPP will not do it, they will listen to you” Mr. Paddy shared his observation on the Joy FM Super Morning Show Wednesday.
He said the abolishing of import duties on spare parts confirms their belief that NPP is more responsive to their business needs than other political parties.
Joseph Paddy told host that it is not a partisan position to state this observation.
In the first budget statement of the Akufo-Addo led NPP government, Finance minister Ken Ofori-Atta announced that that some eight taxes will be abolished and four others re-adjustment in 2017.
The statement sparked celebrations in Abossey Okai, the spare part hub of the capital, Accra.
Government explained the move is part of a campaign pledge to ensure that Ghana becomes the most business-friendly country in Africa.
It has been 46 days since the March 2,2017 announcement but the reliefs have not taken effect.
Chairman of the Association, Joseph Paddy who is also the PRO of Ghana Union of Traders Association (GUTA) said Ghana needs to reach an agreement with ECOWAS before the tax relief can be fully operational.
According to Joseph Paddy the government is in talks with sub-regional body ECOWAS which has a common external tarrif for member states.
He said all importers in ECOWAS pay the same tariff for importing spare parts. But there is a provision that allows for waivers on some 197 commodities.
He said dealers expect government to engage parliament when it returns from its recess.
The chairman said dealers have waited for so many years to get the reliefs and can afford to wait for a ratification that could happen within a month.
Explaining the value of the reliefs, Mr. Paddy said duties on spare part imports is about 50% of the cost.
“If I am to import goods worth $100,000, cumulatively I am paying about $50,000 as duty” he said. Government relief means he can now save $5,000 when he imports.
He said the March 2 announcement of the abolishing of two taxes on imports – duty and 1% special levy – reduces the tax burden from 50% to 39%.
“That was a very good news…we are grateful for government intervention” Paddy said.
Even though the Spare Parts Association relations with the NDC during its days in government was frosty, Mr Paddy rejected the view that the spare parts dealers are sympathetic to the NPP.
In February 2016, the Association was part of a large group of businesses under the Ghana Union of Traders Asociation that announced a three-day close down of shops.
It was to demand that the NDC government suspends some 19 taxes imposed on all import duties since the begining of that year.
The taxes included a 17.5 percent Value Added Tax (VAT) imposed on import duties. Others included a stamp tax, special tax, VAT, bank charges, flat rate, Destination Inspection charges (even when the Destination Companies are no longer working at the port) were being charged at the port.
President of GUTA George Ofori directed that from Monday February 28, to Wednesday March 2 all businesses and shops within the Abossey Okai spare parts dealing enclave be closed .
GUTA president George Ofori addresses a press conference in February 2016
Mr. Paddy indicated it has no agenda against the NDC government. He explained that before the elections they invited the two main parties to meet with the dealers at Abossey Okai.
“NPP responded. The other party didn’t respond” he said.
He said for years the spare parts dealers have been prevailing on the previous government to remove what he called nuisance taxes.
The Association has also lamented the cumbersome procedures in clearing goods at the port. He said an importer needs to pass at least 15 hurdles to clear goods.
He said it is common to find in garages, cars of clients who are unable to pay for spare parts and stressed these frustrations expressed for many years are known to the NDC and the NPP.
They have also called for the abolishing of a 2% special levy and another 1% special levy apart from the 10% duty on imports.
“So if another government has come and it is responding to this call, why don’t you think we will respond positively?” the chairman said.