President Mills and his persuasive anger

E. Ablorh-Odjidja, Ghanadot

February 15, 2011 

After seeing the Anas video on corruption at the Port of Tema, President Atta Mills became persuaded enough to ask for the support of the average citizen; never minding the fact that some of us, to whom he appealed, may still be skeptical about his public outrage.

But there is a need for understanding. This is made necessary by civic obligation, the same that probably must have driven the president to state openly his outrage.  The greater good requires that we give him the support to fight corruption.

This missive is, therefore, written as a pointer of awareness to a particular revenue collection policy at Ghana Customs, Excise & Preventive Services (CEPS) that allows in parts corruption.

We will forget for now that President Mills, in his previous public profession as the commissioner of Ghana's Internal Revenue Service, from 1986 to 1996, must have already known how corrupt some of our revenue collecting agencies are.

And we will hold the view that this former master of revenue collection, now in office as president, is the most prepared executive to combat the massive corruption - the underhand, scurrilous activities of public officials who enrich themselves at the expense of the state.

Ask anyone who lived abroad and had the misfortune of shipping home a vehicle for personal use.  And he will be able to tell you about an aspect of the corruption racket that oversees transactions at the ports.

The corruption traps are many; from demurrage to other accessorial services. But nothing in the process beats the racket inherent in the valuation for imported vehicles.

Valuation at the port form the basis for duties and taxes collected on the vehicles, which supposedly is done per strict government policy.

The problem is this “strict” policy is arcane and flawed and can easily be manipulated to serve the purposes of corrupt officials.

In the US, the valuation of vehicles is open, neutral, and on the web. 

Systems on the web, such as Kelly’s Blue Book or Carfax, can zero in on a vehicle’s value in a moment of a click.  Officials in Ghana to date have avoided these sites for free use as a tool for vehicle evaluation.

And since the open valuation on the web is not used, a valuation policy is left in place that seems crafted to confuse the average importer.  And this is how corruption starts.

The policy reads as follows:  “For the purposes of levying taxes the value of a vehicle shall be deemed to be the Home Delivery Value depreciated as below plus the Freight and Insurance as stipulated under section 90 of PNDC LAW 330, 1993.”

The depreciation steps are:

1. Where the age of a used motor vehicle does not exceed six months - The price shall be deemed to be the first Purchase Price

2. Where the age exceeds six months but does not exceed one and a half years - Eighty-five per centum of the first Purchase Price

3. Where the age exceeds one and a half years but does not exceed two and a half years - Seventy per centum of the first Purchase Price

4. Where the age exceeds two and a half but does not exceed five years. - Sixty per centum of the first Purchase Price

5. Where the age exceeds five years - Fifty per centum of purchase price

And when you ask what the purchase price is, the confusion begins because the officials are not willing to accept the invoice the importer proffers.  

They already have a  list of prices for your vehicle, but the models and their prices selected end up to confuse, and usually at your disadvantage.

The reader should note how every step of the depreciation progression is based on the higher end of the first purchase price of the vehicle. 

No consideration is allowed that the importer could have bought the car used or that it had been in his possession the entire time, and, therefore, could have paid the full price before shipping it home.

But in the eyes of the CEPS, its value has to be determined again.   

In the case of a personal used vehicle, you end up being slapped with the opportunity to practically buy the vehicle that you owned 100% again, at CEPS valuation, on the sheer weight of the duties and taxes collected.

CEPS may be correct for disrespecting receipts from importers at face value.  But where in this process does it say that CEPS is right in its assessment of the value?

An importer may tender a false or doctored receipt to Customs.  A change in ownership or a wish to cheat may further cloud the evaluation process.  But certainly, some simple steps can be taken to make the valuation process transparent and fair for both government and the importer.

One piece of information that can be found on vehicles from the US can help.  Full payment is expected before liens can be released for export of the vehicle.  The lien can indicate value and year of purchase. 

There is also another method or approach.  The prices, depending on the vehicle identification number, condition, and history of the vehicle, are already stated in Blue Book and CarFax on the web.

With the entry of a vehicle’s particulars into these web-based programs, valuation can be easily determined.  

Collection of duties thereafter becomes a mathematical proposition and not guesswork.  And government coffers thereby are made richer and less vulnerable to fraud.

There is an added benefit to the usage of the web in this valuation exercise.  As particulars of the vehicles are entered, the history of that particular vehicle becomes transparent. 

A stolen vehicle can be spotted and road-unworthy ones are found and eliminated from use on the roads; thereby providing a measure of safety for traffic and transportation. 

Considering the carnage on our roads these days, this added feature from the web-based programs will make the duty collection process worthy. 

All the above can be done by a change in government policy for CEPS.

The corrupt are made happy when a government makes porous policies concerning revenue collection at our ports that allow corruption.  The rent-seeking taxes always go to benefit the official and not the government.

President Mills’ anger is justified.  There is a need to worry about the behavior of CEPS officials at the port.  There is justification for revenue collection, but this validation is rendered useless when officials continue to bleed the public for every penny that comes their way because of lax policies.

E. Ablorh-Odjidja, Publisher www.ghanadot.com, Washington, DC, February 15, 2011

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