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State loses millions from undervaluation of imported fruit juice

In some instances, they said different rates were charged for the same brand of product from the same supplier on the same day.

They contended that the significantly different values which were quoted could not be supported by any of the so-called World Trade Organisation (WTO) rules.

For instance, on March 4, 2015, a particular company (name withheld) per Entry Number 42015005439 brought in Don Simon Multifruta Nectar and was made to pay Euro 0.31 per litre.

On that same day – March 4, 2015 – another company (name withheld) per Entry Number 42015084505 also brought in Don Simon Multifruta Nectar and was made to pay Euro 0.49 per litre.

In 2014, a minimum guideline for a tax of around US$0.85/litre (approximately Euro 0.77/litre) was set for inspection companies.

Analyses of the hard copies of the import documents, including the final valuation report issued by an inspection company and made available to this paper, suggested there could be some discrimination in the application of duties.
Customs reaction

However, the Customs Division of the Ghana Revenue Authority (GRA) has dismissed the claims of local producers of fruit juice, explaining that a standard rate of 20 per cent is charged as import tax on a litre of fruit juice imported into the country.

The rate, it explained, was calculated based on cost, insurance and freight (CIF) value.

Sources within the industry said the nature of the undervaluation of the imported fruit juices was serious and called on the government to take immediate action to check the practice.

Others wondered why those guidelines were being blatantly flouted and ignored to the detriment of the country, leading to huge losses in revenue.

“We produce the same items in the country, pay the right taxes and give employment to many Ghanaians but some of the fruit juice importers undervalue theirs,” one source said, adding that “when they do so, they are able to sell at cheaper prices because they pay less to the state in terms of taxes.”

The sources described the practice as most unfortunate and noted that until the practice, which is widespread, was halted, the government would not be able to meet its revenue target.

The sources noted that in mid-2013, the Customs Division of the Ghana Revenue Authority (GRA) undertook some remedial measures to plug those loopholes but said the bad practice had reared its ugly head again and causing serious challenges at the points of entry.

“The government should not sit down and allow some unpatriotic importers to deprive the state of what it deserves and that is why we want some action now,” the sources said, adding that “we have petitioned the appropriate authorities but nothing seems to be done about it all this while”.

The source wondered who were behind this blatant tax evasion and why they were being allowed to continue despite persistent protests from industry players.
Ghana Revenue Authority

Reacting to the concerns of the fruit producers, the acting Assistant Commissioner in charge of Communication and Public Affairs, Mr Robert Mensah, told the Daily Graphic that the only time import duty was waived was when the import emanated from another Economic Community of West African States (ECOWAS) country.

He said under the ECOWAS trade liberalisation scheme, importers had their import taxes waived subject to certain conditions.

Those conditions, he said, included an importer being registered with the ECOWAS Secretariat, in addition to the production of a chamber of commerce certification from the country of origin, adding that that must also be routed through the Ministry of Foreign Affairs and Regional Integration.

Mr Mensah said it was possible for the same product purchased from the same country to have price variations that could affect the tax charged.

That, he explained, was because the same item might have been bought from different sources at different prices.

He, however, added that even in that case, the price variation would not be great.

There had been instances, he said, when some importers had presented fictitious documents such as invoices, saying in those cases, the GRA kept a price database from which it made reference to rectify any anomaly.

Source: Daily Graphic

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