Choicenewsonline Your Choice Is Here
Association believes it’s prudent we set some records straight on the above underlined heading.
There have been recent media reports which seeks to create an impression that a lot of Ghanaian importing companies especially in the Tema enclave are evading taxes at the country’s port whereas others are engaging in money laundering through Port transactions.
It would be prudent for members of the inky fraternity to have a grasp of how some trading activities at the Port is done with respect to valuation of duties and applicable tax exemptions.
The reason for educating you on how these policies work at the port, has to do with some news publications which seeks to create the impression that some importing companies are taking undue advantage of this policy to evade taxes at the detriment of the state and also launder money all in the name of importation.
A recently held press conference by the Movement for Truth and Accountability (MFTA) an Accra based Pressure Group, accused some Importing Companies for under invoicing, tax evasion and money laundering.
This misleading information has been compounded with an ill-informed news publication by WHATSUP NEWS, an E-Newspaper which also alleged in its 1st September 2021 edition of fraud on the part of one of the country largest Importer of frozen foods.
It is sad to note that these series of misleading reports, has done more harm than good to most of these reputable companies that were mentioned in the said report.
ISSUE OF UNDER DECLARING
Per the said reports, most of the importing companies were accused of under declaring tax by importing far less of goods they had stated and paid for through the Import Declaration Form (IDF). However, we think this accusation lacks merit since the authors of the said report failed to learn that the GRA and the various Banks that transact business with these companies can track any transaction through the IDF to know if an importer is under declaring.
It would also interest you to know that, if an importer pays 2million dollars to his/her supplier for goods, he/she is not bound to receive the said goods at a go. It could take probably a year or the goods may come in tranches even though full payment have already been made and captured in the IDF. This does not mean the said importer is cheating the state or under declaring what he paid for.
SUPPOSED MONEY LAUNDERING
The said report also alleged that, the accused companies are engaging in money laundering through port transactions. Per the claims of the pressure group, the companies involved in the said act pay huge sums of monies for goods but end up not clearing any goods from the port.
Such claims are false, per the standard port practices, an importer can receive goods on credit after raising a letter of credence, with his/her supplier giving the said importer a duration of let’s say 9o days to pay back. Even though the said importer received the said goods on credit without paying a dime, he/she is bonded to reimburse the supplier after the sale of the goods.
In some instances, the importer could end up paying more for the goods he/she cleared on credit which was captured on the IDF, due to default in the agreed time of payment, or the credit maturing. In this case it would be ill-informed on the part of an individual to assume that an importer is engaging in money laundering because he/ she has paid for goods that is nowhere to be found, even though the said goods had longed been cleared on credit.
TAX EXEMPTIONS/ SPECIAL VALUES
In the case of some companies taking undue advantage of the special value or tax exemption policy to rob government of millions of cedi’s, the Importers and Exporters association believes the said pressure group or media houses got it all wrong in their reportage. the case of special value or tax exemption is applicable to all importers who meet the criteria a set up by the Finance ministry. Per the 1994 General Agreement on Tariffs and Trade, an importer can file an application through the finance minister for customs to downward the benchmark value on his/her consignment which is yet to arrive in the country.
Per the application the importer must submit all necessary documents being it contract, pro-form invoice covering the said consignment, which must also state the volume of goods being imported and for which given period will those consignments be cleared from the port.
For your information, the determination of who enjoys such special policy which was adopted by government some two years ago lies with the Finance ministry on whose recommendations will be effected by the Ghana Revenue Authority GRA after the necessary background checks have been conducted by it certification and valuation team.
It is quiet worrying and disheartening to know that, some journalist and individuals who have all the liberties to conduct a proper investigation and feed the public with accurate report, will churn our such illinformed reportage all in the name of “Breaking News” or to attract traffic.
Our checks as an Association and a body which most of these accused companies are members of indicate that, the allegations are entirely untrue.
It would interest you (members of the press) to note that, an investigation by EOCO and the Financial Intelligence Center on the said matter, which saw the accused companies being invited to produce all necessary documents exonerating them of any wrongdoing, concluded with the said companies being exonerated.
Apparently the investigations by the two bodies revealed that none of the accused companies were engaging in any form of money laundering or evasion of taxes. A data from Customs confirmed monies paid by the said importers tallied with the consignments/goods they received.
Also, claim on the issue of freight charges being determined by the GRA, is flawed, since that lies solely with the shipping lines whose determination on whether am importer should enjoy some form of exemption depends on the years of business relationship between both parties which is mostly termed as loyalty discount.
SUPPOSED GRA MARKDOWN VALUE
Another publication by a E-Newspaper also claimed the Ghana Revenue Authority had granted a markdown of 5 to10% in benchmark values to an importing company on virtually all frozen foods it imported.
This is a misrepresentation of fact spewed out by the said media outlet since the said markdown value was determined by the finance ministry through GRA who had acted in accordance with the 1994 General Agreement on Tariffs and Trade GATT.
Per section 2 clause 2 of the GATT agreement, which states categorically that where the costs and charges are included in the transaction value, an adjustment shall be made at a request of the importer to take account of significant differences in such costs and charges between the imported goods and the identical goods in question arising from differences in distances and modes of transport. And in the case where more than one transaction value of identical goods is found, the lowest such value shall be used to determine the customs value of the imported goods.
This goes a long way to show that some of the accused companies satisfied all requirements to enjoy government exemption policy which is aimed at helping local investors enjoy some form of leverage being given to the multinationals.
We are very sudden with recent happenings which goes a long way to cast a snare on the enviable reputation of these companies whose operations impact so hugely on the country’s GDP. For your information these importing companies have created some thousands of direct and indirect jobs in the private sector, whereas their credentials and value in the international market stands to be soiled with these needless, ill-informed and politically induced reportage.
We also take the opportunity to urge our members not to hesitate to approach the association with the necessary information that could be used to dispel this form of character assassination when the need arises in the nearest future.
Signed
…………………
Samson Asaki Awingobit
Executive Secretary, Importers and Exporters Association.
0243575046
