Gov’t to ban import of ‘accident cars’, used vehicles older than 10 years

• Posted on March 4, 2020March 4, 2020
• by Nana Kwesi Coomson
• Comment

Government is set to ban the importation of used vehicles that are older than 10 years old.

The government will also place a total ban on the import of salvaged cars, also known as accident cars, pending the full passage of the Customs Amendment Bill.

For the purposes of clarity, a salvage vehicle has been defined as one “which has been wrecked, destroyed or physically damaged by collision, fire, water or other occurrences and does not have a clean title.”

The Bill was passed today at the second reading stage today in Parliament.

According to the joint report of the joint committee on Finance and Trade, Industry and Tourism, the government has predicted an estimated revenue loss of GHS802 million over the next three years after the review of the policy that is in line with the Ghana Automotive Manufacturing Development Programme.

The amendment is to provide incentives for automotive manufacturers and assemblers registered under the Ghana Manufacturing Development Programme.

A clause in the amendment empowers the Minister of Finance to specify the date on which the ban will come into place.

Objections from Minority MP

The MP for Tamale Central, Inusah Fuseini, is, however, calling for the withdrawal of the Bill because of the financial implications and the potential loss of jobs associated with its implementation.

“There is a large body of Ghanaians whose business is second-hand vehicle dealing and they were represented at the joint committee meeting. They raised the point that this Bill… does not offer second-hand vehicle dealers any protection.”

He also said the second-had car dealers deserved to be allowed to “bring in their vehicles and compete with the vehicles that will be manufactured by the automobile assembly.”

On the projected losses, Mr. Fusseini felt the amount was too much for the country to bear.

“This obviously will be too much for this country. For three years you are losing [almost GHS1 billion.]There is no guarantee that we will be able to reclaim this GHS1 billion through the employment by that will be created,” he argued.

Ghana’s Automotive Development Policy

Ghana has put in place an Automotive Development Policy to provide the necessary framework to establish assembly and manufacturing capacity in Ghana.

Toyota, Suzuki, Volkswagen, Nissan and Sinotruk are the major automobile companies with an interest in Ghana.

The Akufo-Addo administration is hopeful that the Ghana Automotive Manufacturing Development Programme will boost employment and offer an import substitution and export promotion to improve the balance of payment.

Protest from car dealers

The Automobile Dealers Union Ghana (ADUG) had threatened to demonstrate against a possible ban on the importation of some categories of salvaged and second-hand vehicles.

The union backed down in favour of dialogue with the government.

Data available from the Ghana Revenue Authority (GRA) indicates that between 2005 and 2016, more than 1 million vehicles were imported into the country; an average of 100,000 cars per year.

Out of the vehicles imported within the period, 80 percent were secondhand vehicles.

Currently, there are over-age penalties ranging between 5% and 50% on vehicle imports of between 10 years and those over 20 years at the country’s ports.

-Citi