Dear Commissioner General,
I must say I support VAT and the efforts yourself and the government are putting into it. As a supporter of the VAT implementation my company is putting in place all necessary legal requirements that are needed.
While we have large inventories of stocks on hands which are necessary for our type of business, prior to 1st December,2006 and coupled with a steady increase in international prices, we have maintained our principle by working with the formula prescribed by you to keep our prices low in the interest of our customers.
This would eventually cause us to lose quite a lot of money I had paid in consumption taxes.
Sir, while I said I am in support of VAT and have taken all measures to comply, I am disturbed as to the GRA’s discriminatory methods of inspection and VAT charged when it comes to new parts imported as against used parts imported.
As an importer of new auto parts I am subjected on inspection to declare every item and to justify its part numbers that may differ because of different suppliers, but the parts and prices are the same. Although we are ordering these parts on line and would pay through the local banks to justify my payments the customs officials still would not release the goods. I would still have to justify the cost and endure all sorts of harassment by the officers who would deal with the matter in their own time. These inspections and verifications sometimes take months.
To add to these stressful moments there is total disrespect by these individuals we call customs officers. This leads to loss of business.
I did my own investigation and my finding is alarming. An importer of used auto parts would normally import several 40ft containers of used parts including new ones consisting of starters, alternators, distributors, shocks suspension parts, ball joints, tie-rod and the list goes on. Each of these parts e.g. an alternator would sell at no less than $10,000 to $20,000 and the same goes with the other items. With customs declaration no detailed inspection is carried out, invoices would only state the bulky parts, doors, bonnets, fender, engines, windscreen as well as new parts. The latter would normally be placed deeper into the container in crates. A list of items would be given to the customs officials who I am told have very little knowledge of the different names of parts and values.
No more than G$500,000 is charged, isn’t this discrimination against the importers of new parts? And the government is losing millions of dollars in revenue. These used parts are selling at prices buyers will normally pay for new ones, even higher. Sometimes the buyer gets very little service from them. To justify my claims just interview a few minibus and taxi drivers and mechanics and you would be shocked to discover how many billions of dollars the GRA is losing yearly. Just review some of your records 5 to 7 years back and see the amount of revenue the customs department was collecting then on new parts imported as against the revenues that they are collecting now from the said new parts importers. A 40 ft container of used parts would cost no more than US $50,000 to 60,000 while the government is collecting just a pittance from customs revenue.
This is not only revenue lost by the government but a lot of junk is imported and losses are incurred by many customers who get little or no service for their money. This makes it harder for the customers who want to replace their parts with new ones which are not available because of the pressure these used parts importers are putting on the importers of new parts. To add to this many of the new parts importers are forced to import inferior parts from China and Taiwan who have a track record in under-invoicing.
To accept these invoices many customs officials are demanding bribes, they even encourage the importer to reduce the invoice so they could have their bribes increased substantially. A large percentage of these customs officials are underground businessmen, they acquire more wealth than businessmen.
I am proposing to you now sir, let the government launch an independent commission of inquiry and make the findings public for this could only benefit the government, your Ministry and serve the interest of the consumers. My conscience bleeds when I am forced to give bribes.
Yours faithfully,
(name and address provided)