Duties on import cars now paid in dollars – Importers complain

Duties on import cars now paid in dollars - Importers complain

Importers of second-hand cars in Ghana are facing significant financial challenges due to the government's policy of levying import duties in US dollars, according to Eric Boateng, the president of the Automobile Dealers Union.

Speaking on the Citi Breakfast Show with Bernard Avle, Boateng highlighted the adverse effects of this practice on the car import business in the country. He explained that while the prices of certain cars remain consistent on the international market, the imposition of duties at the port, particularly in dollars, substantially impacts importers.

Boateng cited examples where importers end up paying significantly more in dollars at the port compared to the original purchase price of the vehicles. For instance, a car bought for $1000 may incur duties up to five times that amount when converted into dollars for payment at the port.

This practice of charging import duties in dollars raises concerns as it contradicts the provisions of the Foreign Exchange Act of the , Act 2006 (Act 723), which prohibits unauthorised dealings in foreign currency by the public.

The situation is exacerbated by the depreciation of the Ghanaian against the US . Currently, a dollar is selling at GH¢14.90 on the forex market, significantly up from GH¢10.97 in the same period last year. Factors contributing to the Cedi's depreciation include a decline in cocoa earnings, poor weather conditions, and the swollen shoot disease affecting exports.

According to Bloomberg reports, the Cedi's record-breaking weakening cycle has left analysts forecasting worse times for the currency, citing elevated risks of election-year funding and stalled debt deals. Despite this, forecasts that the Cedi will end 2024 at GH¢12.25 to a dollar.

The challenges faced by second-hand car importers underscore the need for policymakers to review the practice of levying import duties in dollars and implement measures to stabilise the currency to support businesses and economic growth.

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