The Head of the Institute of Statistical Social and Economic Research (ISSER), Prof Peter Quartey, told Joy FM yesterday that contrary to public perception, there was no shortage of dollars within the banking sector. He argued that any importer who wanted the American dollar could approach his or her bank for support.
He alleged that some members of the Ghana Union of Traders Association (GUTA) prefer buying the dollar from the black market because they do not want the tax authorities to know their volume of imports.
According to the Legon Professor of Economics, when these traders take the dollars from the banks, the value of their imports is automatically known. They cannot, therefore, come and make any under declaration at the port, because they would be exposed by the tax authorities.
To avoid some of these exposures, sometimes GUTA members prefer buying the dollars at the black market to import their products into the country. But when they struggle to get the dollars from the black market, the impression is created that there are shortages of the American bucks in the system. The Chronicle finds this revelation very interesting. It also exposes how the state is allowing the black market to determine the exchange rate of the dollar in the country.
Until recently, the exchange rate of the cedi to the dollar was so high that it affected every commodity in the country. The banks could not meet the demands for supply of the dollar, but the black market was always prepared to step in. How these black market dealers were getting the dollars could not be properly explained. There was even an allegation that some of the banks were giving out the dollars to black market operators to make more profits.
Since no country can develop without the payment of the required taxes by her citizens, if what some of the GUTA members are reportedly doing is actually true, then they are not only fuelling the high prices of the dollar, but actually collapsing the national economy. As we earlier indicated, when the dollar rate hit the roof during the period we are referencing, it affected every commodity in the country. Numerous projects initiated by individuals were halted because they could not afford the high prices of materials.
Several government projects were also halted, apparently due to low taxes the government was collecting. In the face of all these difficulties, traders were only thinking about how to outwit the system and make more profits at the expense of the state. Meanwhile, the same traders will be complaining about poor roads and how it has affected the retail prices of their products.
As a country, we should not allow this development to thrive. The Chronicle is, therefore, advising the government to step in and make sure that all dollars purchased for the purposes of importing goods into the country go through the official sources. This is the only way the state can be able to seal the loopholes the traders are exploiting.
As for the black market, they cannot be stopped, but if the government insists that dollars meant for importation of goods should be channelled through the banking system, it will help to curb the practice of buying from the black market with the sole aim of dodging the payment of right taxes, as has been made known by Professor Quartey. Attempts by individuals and companies to avoid the payment of right taxes to the government is becoming one too many, and the earlier the bad practice is stopped, the better it will be for the country.
The ambitious plans by the current president, John Dramani Mahama, to construct a six-lane road from Accra to Kumasi, coupled with other roads his government has promised the nation, would become a mirage if the people fail to pay the right taxes. This is why the government must be serious in tackling some of these pitfalls in the interest of the country.
