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BILL TO REMOVE TAXES ON SPARE PARTS PASSED - Despite Minority protests

Business & Economy

Parliament has passed the Customs Amendment Bill 2017 that would scrap duties on both old and new spare parts brought into the country.

Parliament has passed the Customs Amendment Bill 2017 that would scrap duties on both old and new spare parts brought into the country.

 

The Bill amends the Customs Act 2015, (Act 891) to reduce the cost of supplies of specified vehicle spare parts in order to provide relief to consumers.

It is worth recalling that in the 2017 Budget Statement and Economic Policy, government proposed to reduce or abolish some taxes to stimulate growth in certain sectors of the economy, hence the amendment of the Act.

Appearing before the Finance Committee of Parliament, the Deputy Minister for Finance, Kwaku Kwarteng informed the Committee that government held consultations with spare parts dealers upon which all the necessary spare parts were identified for inclusion in the zero-rating. He was optimistic that the Bill captures virtually all commonly used vehicle spare parts.

Presenting the Report of the Finance Committee, the Chair, Mark Assibey-Yeboah (Dr.), told Parliament that the removal of the tax affect both new and used parts and therefore importers and consumers of both new and used spare parts stand to benefit from the amended Act .

He subsequently explained that even though Ghana does not require the Common External Tariffs of the ECOWAS, the Committee had duly informed the secretariat of the CET about the policy.

He made this remark in reaction to the concerns raised by the Minority on the matter.

Deputy Minority Leader James Avedzi said the move would only benefit spare part importers and not the ordinary Ghanaian.

As to how much revenue would be lost as a result of the passage of the Bill, the Committee was informed that the amount realized from the taxes on the specified vehicle spare parts were GHC23,876,000 for the first, GHC32,678,443 second, GHC21,400,000 third and GHC19,547,000 fourth quarters of 2016 thus a total of GHC97,501,443 for the entirety of 2016.

As part of the 2017 budget statement that was read on the floor, the Finance Minister Ken Ofori Atta announced that import duties had been removed on spare parts,  a major policy decision which got spare parts dealers at Abossey Okai in Accra and other parts of the country jubilating.

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