Mr Speaker, I rise to support the Motion and to present your Committee's Report.
The Customs and Excise (Duties and other Taxes) (Amendment) Bill, 2013 was presented to Parliament by the Hon Minister for Finance and read for the First time on Friday, 28th June, 2013 and referred to the Finance Committee for consideration and report in accordance with article 174(1) of the 1992 Constitution and Order 169 of the Standing Orders of the House.
The Committee was also to determine whether Bills of an urgent nature can be taken through all the stages in one day in accordance with article 106 (13) of the Constitution and Order 119 of the Standing Orders of the House.
Pursuant to the referral, the Committee met with the Hon Minister for Finance, Mr Seth E. Terkpeh, Deputy Ministers for Finance, Hon George Kweku Ricketts- Hagan and Hon Cassiel Ato Forson, officials from the Ministry, the Attorney- General's Department and Ghana Revenue Authority (GRA) and considered the referral.
The Committee is grateful to the Hon Ministers and officials from the Ministry, A-G's Department and GRA for attending upon it.
The Committee referred to the following documents at its deliberations:
The 1992 Constitution of Ghana.
The Standing Orders of the Parliament of Ghana.
Customs and Excise (Duties and Other Taxes) Act, 2012 (Act 840)
The Customs and Excise (Duties and other Taxes) (Amendment) Act, 1996 (Act 512)
The Customs and Excise (Duties and other Taxes) (Amendment) Bill.
The Government, in a bid to reduce prices of telephone sets to encourage usage, removed the import duty on telephone sets. Unfortunately, the gesture has not yielded the desired results. Prices of telephone sets have actually increased over the period contrary to government's objective.
There is, therefore, the need to rein- troduce import tax on telephone sets to generate revenue and also create an even playing field for locally manufactured telephone handsets to favourably compete with the imported ones.
The Bill also reviews downwards import duty on plastic and plastic products from 15 per cent to 5 per cent on the ex-factory price to be computed on the CIF value of the goods to be paid at the point of entry. It also expands the tax base to include all plastic and plastic products.
Purpose of the Bill
The Bill seeks to amend the Customs and Excise (Duties and other Taxes) (Amendment) Act, 1996 (Act 512) to
impose import duty on telephone sets including mobile, cellular and satellite phones and to review the environmental excise tax on plastic and plastic products. The Bill repeals Tariff No. 6 of the Customs and Excise (Duties and other Taxes) Act, 2012 (Act 840).
Provisions of the Bill
The proposed Amendment to the Customs and Excise (Duties and other Taxes) (Amendment) Bill is divided into two clauses.
Clause 1 amends schedule of Act 512 to re-impose a 20 per cent import duty on telephone sets and to review the duty on plastic and plastic products.
Clause 2 repeals tariff No. 6 of the Customs and Excise (Duties and other Taxes) (Amendment) Act, 2012 (Act 840).
Urgency of the Bill
The Committee, in its deliberations, considered the Bill to be of an urgent nature and must be taken through all the stages of passage in one day in accordance with article 106 (13) of the Constitution and Order 119 of the Standing Orders of the House.
Possible effects of the proposed tax
The Hon Minister indicated that the re-imposition of the tax will offer protection to local telephone sets manufacturers. This, in the view of the Hon Minister, will create employment and eventually increase government revenue.
Plastic waste management
The Committee observed that though the Bill also seeks to review the environmental excise tax on plastic and plastic products, no provision was made
to allocate portion of the revenue to deal with the menace of plastic waste in the country. The Committee noted that since the tax is specifically on plastic and plastic products, a portion should be set aside to manage plastic waste in the country. The Hon Minister, however, stated that the tax system in the country is overburdened with earmarked funds.
According to the Minister, about 88 per cent of revenues collected in the country are earmarked for various activities and sectors of the economy.
The Hon Minister, however, proposed that the Ministries of Environment, Science, Technology and Innovation and Local Government and Rural Development could develop a comprehensive sanita- tion management programme for consideration by Cabinet. The Committee, therefore, calls on the two Ministries to, as a matter of urgency, develop a compre- hensive sanitation management prog- ramme as proposed by the Minister for Finance.
The estimated revenue expected from the imposition of the levy for the remaining half year of 2013 was given as follow:
Handsets -- forty-nine million, eight hundred thousand Ghana cedis (GH¢49,800,000.00); and
Plastic and Plastic products -- twenty- six million Ghana cedis (GH¢26,000,000.00.)
The Committee upon a thorough examination of the Bill, recommends to the House to adopt its Report and take the Customs and Excise (Duties and other Taxes) (Amendment) Bill through all the stages in one day in accordance with article 106 (13) of the Constitution and Order 119 of the Standing Orders of the House.
Ranking Member of the Committee (Dr Anthony A. Osei): Mr Speaker, I believe that all these Bills we are considering, we have been informed by the Hon Minister for Finance that there is an urgent need to fill a revenue gap and with that principle, I do not have any objection.
But Mr Speaker, even if that is what we want to do, we have to be careful about the reasons that we adduce for doing that. Mr Speaker, if what we really want to do is to protect local manufacturers of telephones, we should say so upfront. But if you read the Committee's Report -- and I dare anybody to give us information to prove otherwise -- it says:
“Prices of telephone sets have actually increased over the period…”
The period we are talking about is 2008 till now, and somebody is telling us that prices of telephones have increased? That is far from the truth. Prices of telephone sets have gone down because of competition, so we cannot adduce that as a reason. The real reason, I think, is what is in paragraph 6.0. We want to help local manufacturers; let us say so. Let us not go through the backdoor and defeat the purpose of the Bill.
Mr Speaker, the reason the duty was removed back in 2008 was that Government was not collecting money. Everybody travels and puts the phones in their briefcase, so nobody was paying taxes on telephones in 2008, and I am sure now, that is what is happening. I am even surprised that they said they would raise GH¢49 million. For the past four years, nobody is paying any taxes on telephones. We should be bold and admit that upfront.
We would not raise GH¢49 million and that is why it was converted to a talk tax; bring more phones in free, but when you talk, you pay. That was the logic.
Now, we are saying that prices of telephones have increased. Where is the evidence? If it is true, provide the evidence. Parliament cannot be asked to do work on the basis of somebody's whims. This is too serious a matter. I would have thought that what we want to say is that, we want to encourage local manufacturers. That is all. But in this case, how many local manufacturers are we talking about? [Interruption.] But if that is what we want to do, let us, as a Parliament, know that, so that we can look at the merits and demerits of it.
But I am very disturbed that we are being asked to do this because prices of telephones have gone up. It is not the best.
We should go back to the original reasons it was removed. Government cannot raise GH¢49.8 million. It is not true. So, let us not kill ourselves. The revenue we are expecting would not come.
As I said, everybody going to Dubai or China puts it in their briefcase. We know that, including -- I will not mention anybody. These arguments were raised in 2008; if we go and read the Hansard, Hon Members of Parliament themselves said when they brought about five phones, they were in their briefcases, no taxes were being paid and those are facts.
Hon Deputy Minister, if this is the reason, please, think twice because it cannot be. The evidence is not true that prices of telephones have increased; they have gone down. So, if we are to take decisions on the basis of this Memorandum, we would be misleading the whole country and I do not want to do that.