It has come to my attention that the Ministry of Finance has instructed the Ghana Revenue Authority (GRA) to reverse the 50% benchmark value reduction against which duties paid by importers at Ghana’s ports are calculated.
I have also seen a letter from the GRA dated May 4th, 2020 addressed to the Minister of Finance in which the Authority listed Companies to be affected by the new revenue measures, and assurances to the Minister of GRA's full compliance.
This move, if carried through as instructed by the Finance Minister, is illegality as it has not been sanctioned by Parliament.
Indeed, under the law, the only institution that can grant the imposition or the variation of tax is Parliament. Article 174(1)(2) is unambiguous as stated under Chapter 13 of the Constitution 1992. In relevant part, the article states as follows:
(1) No taxation shall be imposed otherwise than by or under the authority of an Act of Parliament.
(2) Where an Act, enacted in accordance with clause (1) of this article, confers power on any person or authority to waive or vary a tax imposed by that Act, the exercise of the power of waiver or variation, in favour of any person or authority, shall be subject to the prior approval of Parliament by resolution.
It is important to admit the challenges government is facing in meeting its revenue projections amidst Covid-19. However, efforts by government to reverse any negative economic trends must be undertaken under the law.
I am aware that Sections 67 & 68 of the Customs Act, 2015 (Act 891), when read together with the Harmonized Systems Code based on Section 66 of the same Act gives the GRA the mandate to vary, but that variation upwards or downwards can ONLY be done if prior Parliamentary approval is sought pursuant to Article 174(2) of the Constitution, 1992. It is important to add that the sections under the Customs Act give the basis or discretion for determining values but that should not be used surreptitiously to vary the effective tax imposition or burden without recourse to Parliament.
The approval of Parliament in the variation of taxes is a condition precedent as anticipated in article 174(1) and any failure to comply with this condition even in the face of the novel challenges of COVID is an illegality that cannot be countenanced by any adherent of the tenets of the Rule of Law.
The levying or variation of taxes are ipso facto, matters of strict law and same must not be breached or side-stepped in the midst of government’s efforts at mobilizing financial resources to meet its 2020 fiscal year projections.
In the light of such clear constitutional provisions, it is inconceivable that the Minister of Finance would be seeking to vary tax measures by mere administrative fiat as in this case.
The Ministry of Finance must, therefore, take immediate curative steps to ensure that proposals to vary the imposition of benchmark values receive parliamentary approval in compliance with the Constitution.
Rockson-Nelson E.K. Dafeamekpor, Esq.
Const., Legal and Parliamentary Affairs &
Source: Rockson-Nelson E.K. Dafeamekpor, Esq. MP-South Dayi
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