Imported vehicle spare parts are now exempted from duty following the passage of the Customs (Amendment) Bill, 2017 by Parliament last Wednesday.
The Bill amended the Customs Act, 2015 (Act 891) to provide for a zero-rate of duty on specific imported vehicle parts.
In the 2017 Budget Statement and Economic Policy, the government proposed to abolish duties on specified spare parts to provide relief to consumers.
Consequently, the Minister of Finance, Mr Ken Ofori-Atta, on May 30, 2017, presented the Bill to Parliament to that effect.
It was subsequently referred to the Finance Committee for consideration and report.
After its consideration, the Finance Committee recommended the passage of the Bill.
Vehicle spare parts
Presenting the report of the Finance Committee, the committee’s Chairman, Dr Mark Assibey-Yeboah, said the removal of the taxes would affect both new and used parts.
Therefore, he said, importers and consumers of both new and used spare parts would benefit from the tax removal.
“The committee, having carefully examined the Bill, finds that its passage is an important step towards bringing reliefs to consumers and also stimulate growth in the domestic transportation sector by making it relatively cheaper and easier for vehicle owners to maintain their vehicles to help reduce road accidents,” he said.
Dr Assibey-Yeboah said members of the committee had enquired to know whether the government had secured the approval of the ECOWAS Common External Tariffs (CET) Secretariat to implement the tax measure.
He said the committee was informed that Ghana did not require CET approval but had duly informed the CET secretariat of the policy.
He said it was further explained that Ghana had a total of 170 exempt lines out of which the country had now exhausted 118, including the removal of duty on imported vehicle spare parts.
Dr Assibey-Yeboah said the country realised GH¢97,501,443 from the taxes on vehicle spare parts in 2016, and GH¢30,441,159 was collected for the first quarter of this year.
Last Tuesday, the Majority and Minority Members of Parliament (MPs) clashed over the Customs (Amendment) Bill.
While the Minority criticised the Bill for disrespecting the country’s Constitution and the ECOWAS protocol, the Majority defended the Bill for being in agreement with all laws, protocols and treaties in the sub-region.
The Minority Leader, Mr Haruna Iddrisu, raised preliminary objections insisting that the Bill did not satisfy the requirement of Article 106, which required the provision of full details of the purpose of the Bill to be captured.
He said the explanatory memorandum accompanying the Bill was not detailed enough as required.