The Automobile Dealers Union Ghana is urging government to be mindful of the survival of second hand car dealers in the country, as it works to ban the importation of used vehicles that are older than 10 years.
The comments follow Tuesday’s passage of the Customs Amendment Bill at the second reading stage in Parliament, ahead of a full debate of the proposed amendments for the final approval.
When the bill is fully approved, government will also place a total ban on the importation of salvaged cars, also known as accident cars.
The General Secretary of the Automobile Dealers Union Ghana, Clifford Ansu, says the union will push for more dialogue for a review of portions of the bill before it is passed into law to allow some type of accident cars in the system.
“If the fender of the car is broken or the tail light and other things are broken and these things can be bought and brought into the country, then I think that should be allowed. But the ones that have totally condemned bodies, cannot be driven at all among others should definitely not be allowed into the country. But if they say cars with broken fenders, tail lights and others can’t be imported then I’ll say that is unfortunate. We are definitely looking at engaging more with government on a mutually beneficial outcome for all.”
The Bill will be fully passed after the amendments are debated
Government has predicted an estimated revenue loss of GHS802 million over the next three years after the review of the policy. This is however expected to be partially offset by the additional revenue from customs duties on vehicles not covered by the programme, according to the joint report of the joint committee on Finance and Trade, Industry and Tourism.
A clause in the amendment empowers the Minister of Finance to specify the date on which the ban will come into place.
Deputy Finance Minister, Abena Osei Asare, quoting the report of the Committee, said “the amendment of the Customs Act, 2015, (Act 891) is to provide incentives for automotive manufacturers and assemblers registered under the Ghana Manufacturing Development Programme (GAMDP), prohibit the importation of salvaged motor vehicles and specified motor vehicles over ten years of age into the country, increase the import duty on specific motor vehicles and provide import duty exemptions for the security agencies and officers of the security agencies”.
The Minority in Parliament is however calling for the withdrawal of the bill because of its financial implications and the loss of jobs associated with its implementation.
Data available from the Ghana Revenue Authority (GRA), Customs Division, indicates that between 2005 and 2016, more than 1 million vehicles were imported into the country; representing an average of 100,000 cars per year.
Out of this figure, 80 percent were second-hand vehicles. According to some quarters, the trend needs to be reversed to allow for the development, nurturing and flourishing of a competitive automotive industry in Ghana.
Currently, there are penalties for over-aged cars ranging between 5% and 100% of the total cost, insurance and freight of an imported car, between 10 years, and those over 35 years at the country’s ports.
Automobile giants like VW, Toyota, Renault and Nissan, have all expressed interest to set up assembly plants in Ghana, aside from local car manufacturer, Kantanka Automobile Company Limited, which is seeking government’s support to expand its production for the local market.