The Class Action Law Suit: The People Vs. Ghana CEPS

Dear Friends,

THE CLASS ACTION LAW SUIT: THE PEOPLE VS. GHANA CEPS

Some of you may have been aware that GLU had made a commitment to file a class action law suit on behalf of all those who had ever shipped goods and personal vehicles through the ports of Ghana and may have had their goods or vehicles over-valued and hence over-taxed or confiscated for non-payment of these duties and charges.

Whiles the laws of Ghana set the guidelines and rules for taxes and duties on one?s vehicle and goods, the value upon which such percentage taxes were to be assessed was left a little vague and at the mercy and discretion of the government officials at CEPS [Customs Excise and Preventive Services] and the Ghana ports and Harbors.

It is the mission of GLU to seek social justice and a fair and equitable taxation for the taxpayers of Ghana. Since we believe in using the rule of law, we have tried over the last year to inquire through one lawyer we paid, on the exact nature of this law and why it was being abused, in our opinion and that of many, at the detriment of returning Ghanaians and importers. The net results, if anybody has studied the car market in Ghana and compared, is that a used car that sells for say $4,000 in the US will cost about $8,000 in Ghana, a country where the average income of workers may be less than a tenth that of an average worker in the USA. It must be noted that this was not the case in the late 1960s and even early 1970s when some of you may have returned home or shipped vehicles. It was part of the policy of Dr. Kwame Nkrumah, our first Premier, to help students and residents abroad return home by not imposing any duties and taxes on their personal goods and vehicles. In fact this definition was for anybody who had been overseas and stayed for one year.

As the economy went south and inflation rate soared in the 1970s and 1980s it was perhaps reasonable to expect that government would reduce spending whiles imposing perhaps a minimal amount of taxes or fees for the maintenance of the ports and harbors. I personally think that a small fee of such nature is within reason. A $1,000 may be the salary of many workers, say clerical staff, for the whole year in Ghana. It may be too much in Ghana for a resident Ghanaian, but for those who have worked overseas they may not complain too much [even though that can be argued also as possibly too high by a returning student]. As such one may speculate that under the economic conditions of Ghana, many returning home after years of working may not complain much if such an amount was imposed. Where the problem started was the early 1980s when government of the day felt the people who went overseas owed the country a debt because they run away during the difficult times, and then the mindset that some people in Ghana were ?living above the means of the others? as Dr. Botchwey indicated in the 1989/90 budget. The duties and taxes on vehicles therefore went up drastically in the 1980s from 35% to 55% average to the 1989/90 when a special ?Super-sales? tax of 500% was imposed against such luxury goods as cars with engine capacities in excess of 2500 cc and items such as Video Recorders (Video Decks in Europe). This writer had to leave his VCR at the airport in 1990 refusing to pay for such a tax and had to return it to the US. A deposit of $300 was demanded also at the time to take in a Camera to Ghana, since the ideas was to prevent people from taking them and selling them in Ghana for a profit.

Our nation has gone through desperate times, no doubt, in the last 3 decades after Nkrumah was overthrown, and nobody can say for sure if this would have happened was Nkrumah alive and kicking like Lee Kuan Yew of Singapore did. However, some of us don?t like Socialism, and so we are not sure if Nkrumah would have changed as we screamed and kicked, or Socialism by itself would have put food on our tables. At that time one could assume higher education and hard work would make adult workers realize a decent dream of home [called bungalow in those days] and car ownership. Everybody including the children of farmers and the poor got free elementary and secondary education, free University education, and an equal opportunity to climb the ladder of the educated elite. Had Nkrumah never been overthrown? We will never know.

The point at issue is that today the taxes are so high in Ghana and the trick in assessment of the value has changed such that no mater what a person does, one is bound to pay about 100% to 200% in duties and taxes on the value of your purchased goods and vehicles for overseas. Could anybody in Ghana, including the President, then afford a simple small Toyota on their salaries? Customs determines the value and it is undeniably far higher than whatever one?s cost was. For those of us who are not multi-millionaires returning home, I can assure you that being asked to pay $7,000 or $15,000 in taxes and duties or arrival in Ghana is no joke! How long does it take for somebody to save that money overseas? Do Ghanaians in the Diaspora get free grants as our governments do? That $15,000 can be used to set up one of many small businesses in Ghana that can provide income. That $15,000 can almost build a small house in one?s village if one is retiring home. Even the rich don?t like to dish money away for nothing. Why such insatiable appetite to collect more from returning Ghanaians is not clear, except that it is the only place one does not have a choice. It has been reported that the government has actually auctioned the vehicles of some people who could not come out with the assessed taxes and duties. This practice must stop! It is extortion and the government needs to be stopped! We need to stop this extortion Now!!

Ghana Leadership Union promised to take this matter to court last June. The courts are back from recess now, and our lawyers are ready. Anybody who is interested in participating in this law suit should send private mail to the President of GLU as below. There may be a small fee depending on the number of people who participate. We will ask later for receipts and an estimate of how much one was over-charged based on the CEPS own estimate as different from the purchase price of the goods or vehicles. Please respond by October 31, 2005 if possible and no later than November 12, 2005.

Sincerely,