Stakeholders in Ghana’s importation sector who have been following developments after the introduction of the Cargo Tracking Note scheme must be feeling a sense of déjà vu as history seemingly, repeats itself. A year ago, government introduced its paperless ports policy, amid intense protests by operators about lack of proper education on how it would work and worries about the added costs they would incur in operating it. After threat,s public demonstrations and boycotts, to which government turned a blind eye, the policy was implemented leading to dramatic improvements in revenues from import duties as importers and their agents found found it considerably harder to evade duties imposed on them by simply bribing government’s agents to look the other way. Eventually, the importers reluctantly accepted their new situation while government officials crowed about the increased revenues accruing to the state.
Sounds familiar? For those who have followed the debate, threats and negotiations that have accompanied the introduction of the Cargo Tracking Note scheme it should.
Last week, Ghana Revenue Authority chieftains from the Customs Division began to crow about the fact that undervaluation of imports by importers and their agents in order to lower their import duty assessments was being uncovered more easily, due to the introduction of the new system. This holds the promise of increased import duty revenue for government at the expense of importers who will have to pay more in the form of the proper import duties.
To be sure, that is precisely why government introduced the CTN system in the first place. It is also precisely why such a large number of importers and their agents opposed it so vehemently. Just as with the paperless ports initiative, government disguised its simple – and justified – desire for more revenue generation beneath an array of technical sounding benefits to all stakeholders; and operators responded by disguising their fear of having their tax evasion opportunities snatched from them with a similar array of technical sounding drawbacks.
As with the paperless ports initiative, all this posturing is being stripped away, by the practical results of the implementation of the CTN which are exposing government’s legitimate gains at the expense of operators illegitimate savings.
However while we acknowledge this, we also consider that genuine importers are having to pay service fees for CTN services simply because government wants to curb their dishonest counterparts. Therefore we suggest that government considers meeting those service costs largely by imposing punitive fees on importers and their agents who are found guilty of under-invoicing. This would enable the service fees charged honest importers to be minimized.
There is the need to reward honesty and punish dishonesty in the private sector’s dealings with the state at the ports and indeed everywhere else. The CTN system is as good a place as any to start.
