The tariff regime is coming after more than ten years of internal negotiations.
Ministers of Finance in the Economic Community of West African States, ECOWAS, on Wednesday in Praia, Cape Verde endorsed a new region-wide tariff regime in line with the vision of the 15 ECOWAS member states to establish a customs union.
The five band tariff regime, which is coming after more than ten years of internal negotiations driven by the technical committee of the ECOWAS Commissions and the eight-member West African Economic and Monetary Union, UEMOA, is modeled after the UEMOA tariff regime, following the 2006 decision of Heads of State And Government of the region.
ECOWAS Commissioner for Trade, Customs, Industry, Mines, Free Movement and Tourism, Hamid Ahmed, said at the opening of a two-day meeting of the Trade, Customs and Free movement Technical Committee on Tuesday that the new tariff regime would contribute to the strengthening of regional economic integration as the region proceeds to a customs union.
The Ministers of Trade, Industry, Mines and Tourism had, during their meeting, considered the draft CET for the region and the draft regulations on highly taxed inputs, customs evaluation, and regional integration community levy to replace the existing community levy for funding the activities of the Commission and institutions of the Community before transferring the report to their Finance counterparts for review and harmonization.
Some 5,899 tariff lines are covered under the new tariff regime with tariff ranging between zero and 35 per cent for the 130 tariff lines that fall into the category of specific goods that contribute to the promotion of the region’s economic development.
Under the new regime, five per cent duty is applicable for 2,146 tariff lines under the basic raw materials and capital goods category, 10 per cent for the 1,373 tariff lines that qualify as intermediate products category, while 20 per cent duty is reserved for the 2,165 tariff lines that fall into the category of final consumer products.
The ministers agreed that the concerns expressed by some member states, such as the treatment of raw sugar, and the request for special treatment for Cape Verde, because of its location and vulnerabilities, should be addressed within the framework of trade defence measures.
They also agreed on the creation of a 1.5 per cent Community Integration Levy whose scope and operations would be the subject of further regional reflection as part of the mechanisms to enable the region cope with the challenges of implementation of the new tariff regime.
The levy would replace the two existing community levy regimes in the region comprising the ECOWAS Community levy and the counterpart Community Solidarity levy for the UEMOA. The replacement would help ensure uniformity in port charges in compliance with the requirements of the World Trade Organisation, WTO.
To ensure effective implementation of the new CET, the ministers urged the ECOWAS Commission to expedite efforts to finalize on the trade defence and other support measures.
The Commission was also directed to expedite action on the taxation of pharmaceutical products by striking a balance between the need to stimulate local production capacity and ensure the availability of drugs to meet the health needs of the region’s citizens.