Ghana is expected to lose trade tax revenue of GH₵115.7m over tariff cuts and the removal of export taxes under the country’s interim Trade Partnership Agreement with the United Kingdom, a parliamentary report has revealed.
The loss represents 10.2 percent of Ghana’s total fiscal revenue from trade with the UK, the report by Parliament’s Committee on Trade, Industry and Tourism said.
Parliament on Wednesday ratified the trade agreement, which is intended to avoid disruptions to trade between the two countries following the UK’s exit from the European Union.
The agreement makes provision for the protection of sensitive industries as well as financial adjustment support to facilitate reforms of the fiscal revenue system, said the report.
Alan Kyerematen, the Minister of Trade and Industry, said on Thursday that the country’s interest will be protected under the agreement.
“The agreement provides an opportunity for our country to export to [the] UK duty-free, quota-free. And I am fully convinced that exporters who are currently exporting to [the] UK would also provide the lead for other exporters of non-traditional products to take advantage of the UK market,” the Minister told Parliament.
Between 2016 and 2019, Ghana exported over £1.5bn worth of goods to the UK. The agreement will ensure this trade is not disrupted and will protect the country’s gains, Mr. Kyerematen said.
Under the pact, most products originating in Ghana would be imported into the UK free of custom duties, while Ghana has undertaken to progressively reduce and eliminate custom duties on products originating in the UK.
“The removal of tariffs on intermediary goods and machinery from the UK will mean cheaper inputs for Ghanaian businesses. This would make locally produced goods more competitive and support industrial development and the country’s integration into global value chains,” said the parliamentary report.
It added that the UK has also agreed to facilitate customs reforms within the Ecowas region.