Parliament: Customs Amendment Bill goes through Second Reading

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Parliament, on Tuesday took the Customs Amendment Bill, 2020 through the Second stage of reading. The Bill is now awaiting the Consideration and Third reading stages where it would be deemed to have been passed by the House. However, these may all be taken in one day due to the classification of “urgent nature” placed on it by the Joint Committee on Finance; Trade, Industry and Tourism.

The Bill is seeking to amend the Customs Act, 2015 (Act 891) to provide incentives for automotive manufacturers and assemblers registered under the Ghana Automotive Manufacturing Development Programme (GAMDP), prohibit the importation of salvaged motor vehicles and specified motor vehicles over ten years of age into the country, increase the import duty on specific motor vehicles and provide import duty exemptions for the security agencies and officers of the security agencies.

The Government of Ghana in August 2019 launched the Ghana Automotive Manufacturing Development Programme to promote the manufacture of automobiles for both the domestic market and the West African sub-region.

The programme is part of the efforts by Government to develop some strategic anchor industries that will promote economic development in the country.

According to the Joint Committee’s report presented by the Chairman of the Finance Committee, Dr. Mark Assibey-Yeboah for the second reading of the Bill on the Floor of Parliament on Tuesday, March 03, 2020, the provisions of the Bill form part of the broad incentives contained in the Ghana Automotive Manufacturing Development Policy (GADP) already approved by Cabinet.

On how much revenue would be impacted by the passage of the Bill, the Report of the Committee observed that, “the review in policy as contained in the Bill would lead to an estimated revenue loss of approximately GHC 802,251,785.00 for the first three years.

“This is however expected to be partially offset by the additional revenue from customs duties on vehicles not covered by the programme.”


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Ban on Importation of Certain Vehicles

The Committee observed that upon the passage of the Bill into law, specific motor vehicles over ten years of age shall be eventually prohibited from being imported into the country. Also, the importation of salvaged vehicles shall be banned regardless of the age, type or description of such vehicles.

Importation of Fully Built Units

The Committee noted that vehicle manufacturers or assemblers registered under the Ghana Automotive Manufacturing Development Programme (GAMDP) shall be permitted to import Fully Built Units (FBUs) of vehicles into the country at rebate of Customs Duty.

It was further explained that the rationale for the rebate is to enable the manufacturers and assemblers to attain certain critical volumes to make their investments worthwhile, especially at the early stages of the industry. The rebate policy, according to the report, is to be reviewed during or after three years.

Exemptions for Security Agencies

The Committee noted that as part of the provisions of the Bill, the Government intends to include security agencies and officers of the security agencies as part of the institutions and persons granted exemptions on imports.

The exemption will also provide incentives and rewards to personnel of the security agencies who go on various assignments and peacekeeping operations in the security interest of the country.

According to the Report, the Ministry of Trade and Industry is optimistic that in about three years’ time, Ghana would become the third largest motor vehicle manufacturing country in Africa, behind only South Africa and Morroco when motor manufacturers commence actual operations.

Some of the known brands of vehicle manufacturers expected to commence operations in Ghana include; Volkswagen,Toyota, Susuki, Nissan, Renault, Kia and Hyundai.

Source: Clement Akoloh || 

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