April 18, 2016

A presentation to the Trade Mission ofthe Federal Ministry for Economic Affairs and Energy in Germany (BMWi) dubbed:

“Ensuring reliable and affordable power supply: Renewable Energy applications for industries in Ghana”

by: Enoch Yeboah Agyepong

IMPORTATION OF RENEWABLE SYSTEMS TO GHANA;

CUSTOM DUTY AND CLEARANCE CHALLENGES

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“Situational Report on Energy in Ghana” - Enoch Yeboah Agyepong © REAG

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“Situational Report on Energy in Ghana” - Enoch Yeboah Agyepong © REAG

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Source: http://cldp.doc.gov/sites/default/files/Understanding_Power_Purchase_Agreements.pdfR E A G

Understanding Power Purchase Agreements

Source: http://cldp.doc.gov/sites/default/files/Understanding_Power_Purchase_Agreements.pdfR E A G

• Political commitment

• Transparency in award

• Involving local stakeholders at all stages

–Design

–Award

– Implementation

• Independent regulator

• Government expertise

• Effective Project Appraisal and Selection

Prerequisites for IPPs Success

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DemandConversion technologyPrimary energy

Integrated Resource Planning (IRP)

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COMMITTED GENERATION RESOURCES (2012 – 2015)

Committed Projects

Installed Capacity

(MW)Dependable

Capacity (MW) Timing Fuel Type

Bui Hydro Power Project - BPA 400 340 Jan. 2013 Water

Takoradi 3 (T3) - VRA/GoG (Phase 1) 132 120 July 2012 LCO/Gas/Diesel

Kpone Thermal Power Plant (KTPP) -VRA/GoG 230 200 Jan. 2014 Gas/Diesel

Osonor Power Plant - IPP 110 100 Jan. 2013 LCO/Gas/Diesel

Takoradi 2 (T2) Expansion- VRA/TAQA 110 100 Jan. 2014 Steam

VRA Solar Power Project 10 0 2013 Solar

VRA Wind Power Project 150 0 2014 & 2015 Wind

Osagyefo Power Barge - IPP 125 100 Jan. 2015 Gas/Diesel

Total 1267 960

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CANDIDATE GENERATION RESOURCES (2015 – 2021)

Timing captures when plant is needed in expansion plan

Candidate ProjectsInstalled

Capacity (MW)Dependable

Capacity (MW) Timing Fuel Type

Osonor/TT1PP Expansion - VRA/IPP 110 100 Jan. 2015 Steam

Takoradi 3 (T3) - VRA/GoG (Phase 2) 132 120 Jan. 2016 LCO/Gas/Diesel

Pwalugu Hydro Project 48 48 Jan. 2018 Water

Juale Hydro Project 87 87 Jan. 2020 Water

Daboya Hydro Project 44 44 Jan. 2020 Water

Total Candidate 421 399

Total Candidate & Committed 1,688 1,359 R E A G

Renewable Energy systems may be powered by:

•solar energy

•wind energy

•biofuels

•geothermal energy

•hydroelectric power

•wave power•...others...

They also possess the characteristic ofnot being metered,

in many cases, therefore can enable households and communities to exist

"off-the-grid" thus enabling something that can be thought of as

of as true independence.

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• The Exchange of Tax Information Portal is an initiative of the Global Forum on Transparency and Exchange of Information for Tax Purposes. The Global Forum conducts peer reviews of its member jurisdictions' ability to co-operate with other tax administrations in accordance with the internationally agreed standard.

• The standard provides for exchange of information on request where it is foreseeably relevant to the administration and enforcement of the domestic tax laws of the requesting jurisdiction. Effective exchange of information requires that jurisdictions ensure information is available, that it can be obtained by the tax authorities and that there are mechanisms in place allowing for the exchange of that information.

• The Global Forum's peer review process examines both the legal and regulatory aspects of exchange (Phase 1 reviews) and the exchange of information in practice (Phase 2). The EOI Portal will track the development of these peer reviews, including changes that jurisdictions make in response to the Global Forum's recommendations.

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This map is for illustrative purposes and is without prejudice to the status of or sovereignty over any territory covered by this map.

http://www.eoi-tax.org/jurisdictions/GH#default

Agreement between the Federal Republic of Germany and the Republic of Ghana for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income, on Capital and on Capital Gains (EIF: 14 Dec 2007)

Convention between the Kingdom of Denmark and the Republic of Ghana for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and Capital gains (EIF: 3 Dec 2015)

eGov Project• GRA DTRD APPLICATION -Total Revenue Integrated Processing System - tripsTM (DTRD)

• RGD APPLICATION - Ghana e-Registration – GeREG (Marriages and Estate Administration)

• Shared Services

• Portal (for GRA and RGD – separate portals)

• GRA PORTAL

• Online TIN Registration (INDIVIDUALS)

• Portal Registration

• Return filing

• E-Payments

• Application for services

• Amendment of registration details

• Application for refunds

• Application for exemptions

• Management of Taxes

• RGD PORTAL

• SMS, eMail, Chat, Appointments and Scheduling

• Infrastructure – DATA CENTRE, DISASTER RECOVERY SITE, COMPUTERS, GENERATORS, AUTOMATIC VOLTAGE REGULATOR, Infrastructure UPS

• KEY STAKEHOLDERS – MIN. OF COMMUNICATIONS, NATIONAL INFORMATION TECHNOLOGY AGENCY, MIN. OF FINANCE, WORLD BANK, RGD, GCNET, GRA AND PARTNERS IN BUSINESS REGISTRATION AND TAX ADMINISTRATION. (DVLA, ELECTORAL COMMISSION, NATIONAL IDENTIFICATION AUTHORITY, GHANA CUSTOMS MANAGEMENT SYSTEM)

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https://egovonline.gegov.gov.gh/EghanaWeb/GRAHome/eghana.portalR E A G

https://emda.gcnetghana.com/mda/TraderLogin.do

• The Current Harmonised System and Customs Tariff Schedule 2012, (HS Code) Ghana will cease to be applicable with effect from 1st February, 2016. It will be replaced by the ECOWAS Regional Common External Tariff,(CET) (HARMONISED SYSTEM; ECOWAS COMMON EXTERNAL TARIFF AND OTHER SCHEDULES).

• Copy of the CET is available for download online

• INSTRUCTIONS FOR CCVR CET Resubmission (Declarants)

• Log on to PAARS

• On the Left Menu Pane click

on MANAGE CCVR

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>>> Latest News Item

GPHA introduces online vessel booking system (July 2015)

• The Ghana Ports and Harbours Authority (GPHA), will, by July, this year, introduce an online vessel booking and vessel allocation system at the ports to further improve efficiency, and make it more cost effective for business at the country’s ports.

• Facility was in line with the ERP module introduced in 2010 to improve port the management system and, all functional processes, to realise higher levels of efficiency.

• A Port Community Association had also been formed to help with policy formulation and ensure that, policies are well co-ordinated.

• On port surveillance and security, he said the electronic gate project was 80% complete. “We have provided identity cards for all service providers in the ports and we are now working on biometric identification systems to help us know who enters the ports to do what, and reduce the incidence of pilfering and stowaways among others,” he said.

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>>> RECAP: News Item

• Optical Character Recognition cameras have been installed, and boom barriers were being updated at the gates to help identify drivers, trucks and their documentations all in a bid to better secure cargo. [Members of the port community called on to co-operate with efforts to IMPROVE SERVICE PROVISION, CARGO CLEARING TIME and MAKE THE PORT LESS COSTLY FOR DOING BUSINESS.

• To further enhance Human Resource Capacity, the GPHA in collaboration with STC of Holland set up a port training centre at Tema.

• To strengthen engagement with stakeholders and the general public, the GPHA has set up a 30 minute communication channel ‘Eye on Port’ on Metro TV (Sundays 5:30 p.m.), and on Ghana Television (Mondays 6:30 p.m.)… discuss all relevant issues engaging the attention of the port community.

• “We have also reactivated the Port Advisory Committee for regulation agencies, security agencies, standardisation agencies, private and public sector organisations operating in the port to review and improve their operations,” said Mr. Ansah.

GPHA, Marketing and Public Relations Manager of Tema Port, Mr. Paul Asare AnsahSource: http://www.ghanaiantimes.com.gh/gpha-introduces-online-vessel-booking-system/#sthash.esYiOihO.dpuf

Ghana Revenue Authority(GRA)

• Acts

1. INCOME TAX (AMENDMENT) ACT, 2016 ACT 907

2. INCOME TAX ACT, 2015 ACT 896

3. GRA ACT

4. TIN ACT

5. VAT ACT 870

6. INTERNAL REVENUE ACT (2006 Amended Version)

7. INTERNAL REVENUE ACT (2012 Amended Version)

8. VAT REGULATIONS

9. COMMUNICATIONS SERVICE TAX ACT

10. GHANA EDUCATION TRUST FUND ACT

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• My CHALLENGES with GRA – Customs, GH

• Ref: the new Tariffs structures showing all new imposed duties and levies. *These new tariffs basically show an overall increase of imported product, and believe it or not now penalize companies in Ghana dealing in renewable energy.

• So totally contrary to normal economic circumstances the prices will have to go up as result, in a market where demand is increasing ???????????????? This is the weirdest thing.

• 1. Clearing process is clear, but timelines of clearing differ from day to day, season by season and person to person. As effect this means that when the clearing process is compromised, even

though the importer / consignee has all documentation and funds in place, that delays exists leading to delays in deliveries which leads to penalties imposed by clients.

• 2. During the clearing process items are removed from the shipment quantities for so called “sampling”. We all know that the

“sampling” is rather for other use but at the cost of the importer. Further if certain quantities are ordered for a certain project, then removing items from shipment leads to under supply and therefore again issues related to penalties and credibility towards clients.

• 3. Port is congested, so often the goods arrive at a certain date in Tema, but offloading of vessels, container handling and clearing process is therefore flawed. The delays as effect result in demurrage charges to the importer who is not responsible for such delays. In efficiency of port

operations lead to increased expenses and time delays to the importer.

• 4. Even though the clearing process is automated since a while now, the fact is that since human beings have to input data in the system, that human errors occur. This leads to wrong items codes being used and even though certain products have a certain tax level, one now is presented with.

• Once can then opt to start the protest processwrong charges because of the wrong input of data, which needs to be done in writing, which takes time. In the meanwhile one is charged for the delay in clearing the goods so in these situation (that happen a lot) it is a loss for the importer.

>>> Member scenario 1

• In the case that a mistake is made in favor of the importer, then during physical inspection the chances are that this fault is discovered, and then a penalty process takes place whereby penalties are imposed. So in short, the importer is penalized for ALL the mistakes, delays, and other caused by CEPS

• 5. Late last year a new rule was communicated whereby all clearing / freight forwarding companies operating under a license in Ghana, need to be fully

owned by Ghanaian shareholders. This new rule was imposed suddenly which as result means that the Ghana Government is forcing large multinational, (some publicly listed) companies such as Bollore, Maersk, Panalpina etc to become ‘local companies’. The kind of companies inconvenienced are in most cases s the companies that have invested on a large scale, are the larger tax payers and

larger employers, and importantly companies that have most experience in management, experience and efficiency. What this is going to do to the situation in Ghana for importers is not clear, but one should anticipate repercussions.

• 6. With the introduction of the new tariffs it is clear that Ghana is desperately looking for additional revenues coming out of importation. This in an economic environment whereby in the same timeframe utility rates are ever increasing, tax laws have been revised causing direct loss of cash flow to companies, insufficient power is made available to industries, and no significant increase in the manufacturing base is noted as alternative to import. We all know that SME’s are the back bone of the economy in any country in the world.

• At this moment and taken into consideration new investment laws, mandatory FDI increases, transport and electricity tariffs, lack of power, new imposed tax laws and now the upward revision of import duties one should anticipate that many companies and especially SME s will close down and that Multinationals will look for alternative markets to operate in (read different countries) due to the huge impact on operating cost. As result less goods will come in, which will further cause price increases due to shortage. The only way that all these imposed actions would benefit Ghana and companies operating in Ghana is if this would allow Ghanaian companies to be established and grow, and reduce dependency on imported goods. For this to happen Ghanaian businesses need capital to invest, technical knowledge, well trained human capacity, locations to operate from, energy to power their businesses and possibly foreign partners.

• With the high interest rates for lending, lack of educational facilities tailored to industrial growth, lack of culture in maintenance and preservation, high property rates and land cost, lack of available power and a continuous change in investment / banking regulations topped with abolishing any incentive I doubt very much that this can be achieved.

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Online 2012 Harmonized Commodities Code database<< Back to start

Showing 4 result(s) for search string 'solar'. Click on HS Code to see the Duty, Taxes and Levies or on other codes to go to that menu.

SECTION CHAPTER HEADING SUB-HEADING HS CODE COMMODITY DESCRIPTION

16 84 8419 841919 8419191000Solar waterheaters

16 85 8502 850239 8502391000Solar powered

16 85 8541 854140 8541401000Solar cells, whether or not assembled in modules or madeup into panels

20 94 9405 940540 9405400010Solar powered

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>>> Member scenario 2

Rate before February 2016

Rate from February 2016

Commodity Description HS Code Duty Vat/NHIL Duty Vat/NHILSolar Powered Generator 8502.39.10.00 0.0% 0.0% 5.0% 0.0%

Wind Powered Generator 8502.31.00.00 0.0% 0.0% 5.0% 0.0%

Gas Powered Generator 8502.39.20.00 0.0% 0.0% 5.0% 0.0%

Solar Panels 8541.40.10.00 0.0% 17.5% 0.0% 0.0%

Solar powered Lamps 9405.40.00.10 0.0% 0.0% HS Code Deleted from Tariff guide

LED Lamps 9405.40.00.20 0.0% 0.0% 20.0% 17.5%

CFL Lamps 9405.40.00.20 0.0% 0.0% 20.0% 17.5%

Solar Panel 8541.40.10.00 0.0% 17.5% 0.0% 0.0%

Solar Water Heater 8519.19.10.00 10.0% 17.5% 5.0% 17.5%

Solar Inverters 0.0% 0.0% 5.0% 0.0%

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•There is no separate classification for solar batteries so its treated the same as any other battery.

•Solar Powered Lamps HS Code: 9405 40 00 10 which existed in the previous tariff book, has been deleted from the current tariff schedule, so anyone who brings in solar powered lamps pay the tariff applicable to any other lamp (20% & 17.5%).

•Room available for ‘subjective charges’

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Other Agencies (other than regulator)

• Subsidies and tax Incentives

• Public Information

• Building Codes

• Appliance labeling and industry standards for products using electricity

• Training Programs for technical workers

• Demonstration projects (that can then be scaled up)

• Energy end-use efficiency in the public sector (for example, schools and hospitals, public lightning)

• Promotion of Energy Service Companies (ESCOs) that assist end-users in identifying, financing and implementing energy savings projects.

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“Situational Report on Energy in Ghana” - Enoch Yeboah Agyepong © REAG

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Africa Power Pools

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INTRODUCTION OF REAG

[RENEWABLE ENERGY ASSOCIATION of GHANA]

• The Association, named and called ‘Renewable Energy Association of Ghana’, appropriately abbreviated as ‘REAG’ has a mission of serving as an organised

platform for all Renewable Energy (RE) & Energy Efficiency (EE) related matters. REAG was established by industry actors in mid 2015 to

drive and achievesustained impacts and effectively channel the Private Sector’s

contribution towards National Development.

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REAG is committed to the following:i. Raise the awareness and profile of Renewable Energy & Energy Efficiency.

ii. Improve and sustain quality of information/design/installation/maintenance & service in the RE & EE industry.

iii. Administer a membership accreditation/certification programme and a code of ethics for best practices.

iv. Promote the development of standards and compliance measures within the industry.

v. Identify and seek funding opportunities for and in the interest of the Association and its members.

vi. Arrange training/capacity building & professional development programmes.

vii. Ensure effective communication within the membership of the Association to enhance synergies and satisfy

mutual interests.

viii.Ensure high level of service delivery, maintenance & support, quality and high standards in the entire RE & EE

value chain.

ix. Serve as the official linkage between all stakeholders in the RE/EE sector and related groups and as an active

advocate platform for Industry & Government for legislative, quality control & sustainability of the sector.

x. Facilitate the development of RE & EE projects.

xi. Perform all other functions and obligations in best practices, with ethics, in integrity and proficiency as desired

by all stakeholders of the association.

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>>>Contact: reagghana@gmail.com / eyagyepong@gmail.com

Airport city, Accra, Ghana: 18yrs ago

REAG

“Situational Report on Energy in Ghana” - Enoch Yeboah Agyepong © REAG

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“Situational Report on Energy in Ghana” - Enoch Yeboah Agyepong © REAG

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Study: Enhancing the Tax & Investment Environment of the Renewable Energy and Energy Efficiency Industry in Ghana.

Secretary & Executive Council Member, REAG

Mit freundlichen Grüßen REAG

Some Useful links:

• http://www.gra.gov.gh/

• https://www.ghanastradinghub.gov.gh/

• http://www.eoi-tax.org/jurisdictions/GH#agreements

• ISIC 4.0 – International Standard of Industrial Classification.The URLs are as follows

• Hierarchy search: http://unstats.un.org/unsd/cr/registry/regcst.asp?Cl=27&Lg=1

• Alpha search: http://unstats.un.org/unsd/cr/registry/regs.asp?Cl=2&Lg=1

• https://www.ghanastradinghub.gov.gh/CET_FINAL.pdf