CET implementation to push import duty on trucks to 20%
Following the proposed implementation of the Common External Tariffs (CET) on February 1, duty paid on trucks imported into the country is expected to rise from five per cent to 20 per cent.
The increment is expected to impact the prices of trucks which constitutes the backbone of equipment used by companies in the mining, real estate and construction sectors of the economy.
The Managing Director of J. A. Plant Pool Ghana Limited, Mr Lolu Akindele, who disclosed this in Accra, explained that the increment would also impact negatively on the operations of equipment importers such as Plant Pool.
Speaking at the commissioning of the company’s new trucks, the Sinotruk T7H in Accra, he said “we have been paying a duty of five per cent on the trucks but from February 1, duties will go up to 20 per cent, and you can imagine what will happen to the cost.”
“It is a major challenge to our operations, I think we need to deliberate and see how we can overcome this. It is not only for the trucks but our Yutong buses as well,” he added.
The development, he said, informed the company’s decision to host a stakeholder dialogue on how to collaborate and come out with a win-win strategy for 2016.
CET in West Africa
The CET was adopted by the 16-member states in the West Africa sub-region to replace all tariff bands currently being implemented by the respective countries.
This means that all items imported within the ECOWAS sub-region would attract the same tariffs.
Ghana, which is a member, had failed to meet two implementation deadlines but is now ready to start this month, according to the Ghana Revenue Authority.
Although the government is expected to generate more revenue from the CET, Mr Akindele said it would pose a challenge to importers in 2016.
“In 2015, we faced a lot of challenges and 2016 is also coming with its own challenges. There was an announcement from the Customs Division of the Ghana Revenue Authority (GRA) that from February 1, we are going to implement the ECOWAS CET, and what that immediately tells us is that duties will go up,” he said.
Increasing cost
J. A. Plant Pool, which is a leading supplier of heavy duty, earth moving equipment and buses in the sub-region, said its cost of operations was likely to go up in 2016.
“From the estimates we have done, the increase in the overall cost will be between 15 per cent and 20 per cent. The question then is, what do we do in the short term,” the company’s MD asked at the dialogue.
New trucks
Commenting on the introduction of the Sinotruk T7H, Mr Akindele said the idea resulted from a joint venture between Sinotruk China and two local equipment distributors, MAN Diesel and J. A. Plant Pool.
The partnership makes the two companies the dual distributors in Ghana.
The MD said the commissioning signified the positive relations between the company and Sinotruk of China, which is also a leading supplier of earthmoving equipment worldwide.
The trucks, he said, came with European technology and was very affordable and highly efficient.