The Minority in Parliament is cautioning the government to tread cautiously over plans to implement the Customs Amendment Act which prohibits importation of salvage cars without broader consultations with major stakeholders.
Effective November 1, 2020, government is set to implement the law passed by Parliament which also seeks to provide incentives for automotive manufacturers and assemblers in the country.
It will also increase the import duty on specific motor vehicles and provide import duty exemptions for security agencies.
But raising concerns, Minority Spokesperson on Road and Transport Governs Kwame Agbodza accused the Akufo-Addo-led administration of attempts to collapse the local car dealership business in favour of foreign interests.
According to him, aside granting tax holidays for foreign automobile companies to assemble vehicles locally, the Act also allows importation of already assembled vehicles without paying duties which will put all local dealers out of business.
This follows a previous assurance from the President at a meeting with car dealers that their jobs will be protected.
But Kwame Agbodza argues that the entire government policy on the automobile industry is inimical to the locals.
“What the implementation means is that a V8 will be free if imported by a manufacturer. It will attract no taxes. But if an indigenous dealer imports the same thing it will be more expensive.
“You will notice the focus is more on the importer or manufacturer; this is because that section talks about the fact that the person will bring it here fully built and sell it cheaper.
“But if you are Ghanaian and you do the same thing, you will pay 35% tax on the same vehicle. We think this is very very obnoxious. Section 58 of the Act also prohibits the importation of salvage vehicles and vehicles more than 10 years old.”
He also accused the Ministers for Finance and Trade of betraying Parliament by failing to present an LI before the implementation of the Act scheduled for November.
“We insisted that we wanted to be part of the decison when it starts and know what it will entail and we believe that the Finance Minister was not truthful to us because before they got to what they are doing, we expected them to come to this house. But they con us into passing the law hoping that we will take part in the final decison.”
Backing these claims, a member of the Trade and Industry Committee, Isaac Adongo said the tax incentives granted the automobile companies in Ghana are counterproductive.
“The people in Abossey Okai and the people in Magazine jubilated on account of a deliberate policy to keep them in business. We were told that import duties on spare parts have been reduced in order to encourage them to import.
“We know that these people serve largely the local automotive industry and so any law that takes away the growth of the automotive industry in the local space will automatically make traders at Abossey Okai and Suame redundant.”
However, in a sharp rebuttal, the Minister for Communications Ursula Owusu Ekufful accused the Minority of pitching the vehicle dealers against the government.
She said measures have already been put in place for the teething challenges inherent in the implementation to be addressed.
“Are we saying we don’t want foreign investment in the automobile industry? Are we saying we don’t want local assembly of vehicles which will end up being cheaper than the imported vehicles that we bring in?
“What even surprises me is the alarming sentiments the NDC is throwing out there that the law bans the importation of salvage vehicles when indeed the law allows salvage vehicles with certain conditions. So which is which?
“How is the automobile industry going to be destroyed because of the local assembly of vehicles? I don’t see it.”