The introduction of the import levy on secondhand spare parts by the previous government drove away customers from all over West Africa who were travelling to Abossey Okai in Accra to conduct business, Ampadu Siaw, President of the Secondhand Spare Parts Dealers Association of Ghana, has said.
According to him, this situation makes the decision by the Akufo-Addo-led government to scrap the import levy a good one that will restore their business to its glory days.
During the reading of the budget statement on Thursday, 2 March, Mr Ken Ofori-Atta, Minister of Finance, mentioned, among other things, the scrapping of excise duty on petroleum products. The government also intends to reduce the special petroleum tax rate on petrol from 17.5% to 15%.
Other taxes that will be completely abolished include the following:
1. The 1% special import levy
2. The 17.5% VAT on financial services
3. The 17.5% VAT on selected imported medicines not produced locally
4. The 17.5% VAT on domestic airline tickets
5. The 5% VAT on real estate sales
6. Duty on importation of spare parts
Also, the 17.5% VAT imposed on traders has been replaced with a 3% flat rate, while businesses that employ young graduates from tertiary institutions will get tax credits and other incentives. Furthermore, there will be tax incentives for young entrepreneurs while the Corporate Income Tax will be progressively reduced from 25% to 20% in 2018.
Additionally, Mr Ofori-Atta said the Akufo-Addo government would initiate steps to remove import duties on raw materials and machinery for production.
Speaking on Ghana Yensom on Accra100.5FM on Friday, 3 March, Mr Siaw said: “The import duty collapsed our business.”
“Once upon a time, we used to have customers from all over West Africa, but because of that tax that resulted in high prices of the spare parts, the customers stopped coming. And so we strongly believe that the scrapping of the tax will restore us to the glory days.
“Abossey Okai and all other spare parts-dealing areas in Ghana are going to be the hub of spare parts and people from all over West Africa will come and do business with us. So we thank the president so much.”
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