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AfCFTA will not affect revenue collection, says GRA

Ammishaddai Owusu-Amoah on AfCFTA

The Ghana Revenue Authority (GRA) says the implementation of the African Continental Free Trade Area (AfCFTA) will not affect the country’s revenue collection negatively.

Speaking on Town Hall Talk on Asaase Radio, the commissioner general of the GRA, Amisshaddai Owusu-Amoah, said: “As I speak, initially we worked on our request for proposal (RFP) and we are working on it to ensure that we get the right systems in place.

“And if we have these systems, what is going to happen is that even though we are not getting the tax from the import duty, once the goods come in and they are being sold [if] we are getting the right VAT on the goods then we’ll still get the revenue from the trading …” he said.

Owusu-Amoah added, “So that we promote trade, get the goods in, but we’ll get the taxes from the effective VAT collection.

“I think that we have already positioned ourselves working towards this area to ensure that by the time the AfCFTA is fully in operation, it doesn’t tend to affect us as far as our total revenue collection is concerned.

“It is part of our total strategy and we are fully aware of it. And we have a plan to ensure that it doesn’t affect us,” he said.

Customs duties to shrink

Wamkele Mene, the secretary general of the AfCFTA Secretariat, has said that customs duties on trading within Africa will fall from next year onwards, once the African Continental Free Trade Area (AfCFTA) agreement comes into force on 1 January.

Mene said unnecessary trade barriers will also be lowered and eventually removed after the agreement takes effect.

Leaders of the continental free trade area, comprising the heads of state and governments of the African Union (AU), have shown enormous political will to start implementing the protocols from 1 January next year, he said.

Wamkele Mene, who was interacting with the media in Accra, added that all is set for the agreement to take off next year, bringing with it fresh opportunities and a new chapter in intra-African trade.

Reformed trading regime

Mene said from 1 January 2021, traders within Africa will experience a reformed trading regime that will be regulated and administered by the new law.

“When your goods transit borders, or as a service supplier your service crosses borders, you will now be subject to a new set of rules,” he said.

“There will be reduced tariffs on the goods themselves. There will be a new system for adjudicating on the disputes that arise from the trading and cross-border activities.”

Sanitary and phytosanitary standards will change, as will the regulations governing operations of customs agencies on the continent, in line with the agreement’s requirements.

Mene explained: “Ultimately, in 15 years, when the transition period has ended, 90% of trade by all African countries that are parties to the agreement will be at zero duties. That is the ultimate objective.” 

About the AfCFTA

The AfCFTA is expected to bring together all 55 member states of the African Union (AU). These countries cover a market of more than 1.2 billion people, including a growing middle class, and have a combined gross domestic product of more than US$3.4 trillion. 

Judged by numbers of participating countries, the AfCFTA will be the world’s largest free trade bloc since the formation of the World Trade Organization (WTO). 

Estimates from the Economic Commission for Africa (UNECA) suggest that the AfCFTA could both boost intra-African trade by 52.3% by eliminating import duties, and double levels of trade if non-tariff barriers are also minimised.

The main objectives of the AfCFTA are to create a single continental market for goods and services, with free movement of business, people and investment, thus accelerating the establishment of a customs union. 

The AfCFTA is also expected to enhance the competitiveness of industry and enterprise by exploiting opportunities for scale production, continental market access and better reallocation of resources.

* “Town Hall Talk is on Asaase Radio on Friday evenings (starts 5pm).
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