trade protectionism

The government of Ghana will soon clamp down on malpractices identified in the Transit Trade regime in the country, Deputy Minister for Finance Kwaku Kwarteng announced here on Friday.

According to him, some goods that were declared at the country’s sea ports as transit goods en-route to Burkina Faso never found their way out of the country.

Speaking at the 2008 Pre-Budget stakeholder conference, the deputy minister pointed out that the practice was a drain on the nation’s revenue and needed to be stopped.

As part of international trade arrangements, traders who declare their imported goods as transit goods are not required to pay the taxes that ordinarily would be paid if imported into the country. There is a regime for monitoring and ensuring that these goods actually leave the country.

“But our discovery is that a good number of times, these goods do not leave. They drive to quiet places in the country; they offload them and it enters into the domestic market. It is quite widespread and we are going to wage war on that practice,” Kwarteng announced.

Although there are no specific figures readily available to ascertain the quantum of revenue losses through this alleged practice, the deputy minister suggested that the figures could be huge based on the volume and value of transit trade between Ghana and Burkina Faso.

Lower than projected tax revenue has been one of the low points in Ghana’s fiscal management during the first half of the year, forcing government to slash expenditure by 3.6 billion Ghana cedis or 820 million U.S. Dollars during the first four months of the year.

In August, Finance Minister Kenneth Ofori-Atta announced a downward revision of spending plans” to conform to lower than projected revenue in order not to compromise fiscal consolidation”. Enditem

Source: Xinhua/


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