Govt reviews policy on tax exemptions

By September 19, 2017All News, Topical

Government has decided to discontinue the requirement for exemption holders to provisionally pay the import duty and taxes upfront and apply for a refund later.

In March this year during the presentation of the national budget, government announced the revocation of import duty and some taxes at the ports deemed nuisance.

Importers were directed to pay upfront but made to come for refund later.

Speaking to journalists in Accra, a Deputy Finance Minister Kwaku Kwarteng stated that importers will now benefit from exemptions from October 1, 2017 once they meet all the requirements.

He maintained that the old system that required importers to pay upfront and later come for refund created some financial challenges for the business owners.

“In our recent consultations with stakeholders, we have better understood the weaknesses in our exemptions regime. We are in a better position to deal with the shortcomings in ways that pose less cost to genuine businesses and exemption holders,” he said.

Mr. Kwarteng stated that government has been able to indentify abuses in the exemption regime since April, 2017 when the policy was instituted.

“For instance in the first eight months of 2016, total import duty  was GHS5.9 billion and total exemptions granted was GHS1.7 billion. As such tax exemptions represented 30 percent of total import duty and taxes”

However, Mr. Kwarteng stated that in the first eight months of 2017, total import duty collected increased to GHS7.2 billion, while exemption total exemptions granted decreased to GHS1.2 billion which is 17 percent of total import duty and taxes for the same period under review.

He explained that as per the status quo, importers will be required to provide documentation that include ,the basis for the exemption , recommendation letter from relevant sector ministry or agency, Customs Classification and Valuation Report(CCVR) or customs Declaration form,  and import declaration form.

The rest include tax clearance certificate, bill of laden , commercial invoices, packing list, tax exemption assessment report and other supporting documents.

Source: citibusinessnews.com