Zero rates on locally manufactured goods could prove probematic in future – Dr. Twumasi Baffour

Senior Lecturer at the Department of Economics of the University of Ghana, Dr. Priscilla Twumasi Baffour, says the imposition of zero tax rates on certain locally manufactured goods could be problematic in the future.

She was referring to the extension of a zero tax rate on locally manufactured African prints for two more years; an extension of a zero tax rate on locally assembled vehicles for 2 more years; and a zero tax rate on locally produced sanitary pads.

These were announced in the 2024 ‘Nkunim’ budget statement and economic plan delivered on the floor of parliament by the Finance Minister, Ken Ofori-Atta, November 15.

According to her, while this may be viewed favourably by local manufacturers in the country, they are in sharp contrast to international trade agreements that Ghana is a signee to.

She explained that the zero tax rates on locally manufactured goods create a barrier where imported products are being discriminated against.

 “I know that under WTO rules for example, the general agreement on trade and tariffs for instance; there is what we call the national treatment. You are not to treat goods that come into your country differently from goods that are imported. If you have any issue, you need to impose the tariff at the point of entry and not when the goods have come in then you begin to discriminate,” she said on Joy FM’s Super Morning Show.

“But when it comes to the technicalities of it, I know that it may not be in the now, but in future Ghana may potentially have to face a few issues with some of these then when it happens you are on AfCTA championing Africa free trade, you’re encouraging your goods to go to other countries, yet you’re imposing restrictions on goods that are coming from other African countries,” she added.

Meanwhile, the Senior Lecturer called for more awareness creation concerning Ghana’s locally manufactured sanitary pads.

According to her, while there are about four main producers of the product in the Ghanaian market, they are not well known to Ghanaians.

“So I am looking at how implementation will be done in the first place, and also whether the average Ghanaian who buys the locally produced sanitary pad would even feel it in the first place because there needs to be a lot of awareness for people to know the brands that are produced locally and the brands that are not, and also in terms of enforcement at the point of sale. So let us know that traders are not putting VAT on these products,” she said.

Source: Ghana News