‘Prices of goods will double if Benchmark values are reversed’ – GUTA warns

The Ghana Union of Traders Association (GUTA) is warning prices of goods will increase significantly if government reverses the reduction of values of selected items.

“Prices are going to double. The benchmark value was the only last straw businesses were holding,” President of GUTA, Dr Joseph Obeng, told JoyNews in an interview.

It follows a statement from the Ghana Revenue Authority (GRA), which announced that effective January 4, Benchmark values will be reversed for some 43 selected items.

The reversal will affect the selected items from all the three categories on which the reversal was applied.

The items to be affected include the home delivery value of vehicles, goods on which benchmark values are applied and all other goods

This means Home Delivery Value of vehicles will no longer be discounted by 30%.

Also, the full value shall be applied without any reduction for all other goods, where the importer has an invoice and the invoice value is higher or lower than the established Transaction Price Database.

But GUTA President, Dr Joseph Obeng has warned that any attempt to introduce this policy in the 2022 Budget will disrupt Ghana’s distribution sector.

In an earlier press statement, he added that scrapping the policy will be suicidal, saying the policy brought relief to the trading community, sanity into the system, and eased tension and agitations amid the impact of the coronavirus on cross-border trade.

“Any attempt to remove this good policy of the government that brought relief will be suicidal for the state because it will not only collapse business but also cause an unbearable rise in prices of goods and services beyond the reach of consumers, especially low-income earners and the unemployed,” he warned.

“We should be very surprised if the government succumbs to this treacherous and diabolic request of the AGI who are trying to lobby against this most acceptable flagship policy of the government to destroy the distribution sector of the economy.”

Dr Obeng further stressed that implementing the new directive will disrupt the value chain of beverage products.

“We are expecting the hike of products by about 25%. This development will heavily hit the food and beverage industry,” he stated.

However, the GRA has stated that in line with the reversal, a “series of engagements have been had with relevant stakeholders to reach a consensus on the implementation of the policy.”

It said the directive will ensure that importers or agents pay 100% duties on selected items.

Read the full statements below

GHANA UNION OF TRADERS’ ASSOCIAIONS

(GUTA)

PRESS STATEMENT

GOVERNMENT SHOULD HOLD ON WITH THE IMPLEMENTATION OF THE REVERSAL OF THE BENCHMARK VALUE POLICY

The Ghana Union of Traders’ Associations is calling on the government to hold on with the implementation of the reversal of the benchmark value policy based on the following:

1. That the devastating effects of the covid-19 pandemic are still prevalent and even in its fourth wave which is worsening the situation.
2. That world commodity prices are still high and going up, with freight charges being extremely high.
3. That the conditions that resulted to the introduction of the benchmark value policy are still prevalent and even worse.
4. That the prices of essential commodities such as food, pharmaceuticals and others will be extremely unbearable for the consuming public which will also affect turnover and volume of trade in the country, thereby collapse businesses.
5. That in the fight against the pandemic, prices of food items, pharmaceutical products etc. need to be affordable to the consuming public.
6. That our local manufacturers cannot meet demand of most of the listed items, therefore, we are not self-sufficient as a country, to surcharge the consuming public.
7. That the lack of competitiveness of our local industries is based on other factors rather than the benchmark value policy of which they (industries) are also beneficiaries.
8. That the exchange rate is also going up at this time.
9. That the competitiveness of the Ghanaian trader within the sub regional bloc- cross-border trade should also be conceded as very necessary and important.
10. That the government through the Economic Management Team had promised to engage stakeholders on the issue before any decision is taken but have not met yet.
11. That in the press conference of the Honourable Finance Minister, he acknowledged the fact that the reversal of the benchmark value would have an adverse effect on importers and that the government would find a mitigating factor to cushion the effect but this has not yet been done.

In view of the all aforesaid, it is our hope and belief that the government will listen to our plea and hold on with the policy for proper stakeholder engagement to take place.

                                                                                       Signed

                                                                                      Dr. Joseph Obeng

                                                                                      President