National these reforms has been the institution of Post

National Graduate Institute for Policy Studies: Public Finance


Selorm Tekpor (MEF17516)

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 Policy Paper Proposal

Impact of Post Clearance Audit on
Customs Revenue Collection In Ghana: 2000-2016

of Problem:

accordance with World Customs Organization (hereafter WCO), governments and their
respective Customs administrations are embracing reform aimed at accelerating
trade facilitation. A key part of these reforms has been the institution of
Post Clearance Audit (hereinafter referred to as PCA) targeted as enhance port
efficiency by way of reduction in time and cost of clearance as well as to improving
revenue generation (World Customs Organization WCO, 2015). As a concept, the PCA initiative is a customs control
process which supports Customs to verify compliance to Customs declarations
through close examination of books, records, business systems and all relevant
commercial data held by importers or businesses after  goods have been released by Customs
administration (WCO,2016). This control system
differs in scope, authority, methodology, and also recognized commercial
environment of different countries (WCO, 2016). And this is against the
background that the introduction of Authorized Economic Operators (AEOs) and other
trade facilitation measures, imported goods are expected to be released at the
borders without physical inspections in most cases. In this circumstance, PCA
is essential in establishing a clear expression of an importer’s level of
compliance with regulatory requirements such as accurate customs duty payments (World
Bank WB, 2011).(Bank, 2013)

the adoption of PCAs, several related studies have been conducted for example Rangarirai
(2016) and Venegas (2011). Unsurprisingly, the evidence is mixed and far from
being settled.  A key limitation of the
extant studies is absence of focus on the macroeconomic conditions within which
PCAs are implemented.   Specifically, and within the macroeconomic
framework, the effect of PCA on the customs revenue collected in the practicing
countries have been less explored. Even those that did, seem to have some
pertinent limitations. For example, Regmi (2015) used the difference in difference
(DID) estimator to assess the impact of Post Clearance Audit policy on revenue
in Nepal. In his approach he control for all customs variables. A major
limitation of his work is the absence of consideration for other macroeconomic
indicators such as exchange rates, inflation and GDP of Nepal. It is suggested
that these variable may have some structural and basic relationship with the
conduct of foreign trade and by extension customs duty.

recognition of this research gap, and including these observed variables, this
study proposes to examine the impact of PCA on Custom revenue in Ghana. Ghana
is selected as the country of study, partly, as an attempt to take comparative
advantage of being a national which allows for contextual understanding and
relative ease in data accessibility. Equally important in the choice of Ghana
is the suitability of the Ghanaian economic context for generalization of the
findings to the wider developing and middle income group of countries.  Most of these countries face similar
economic, demographic, environmental and political challenges in addition to
similar aspirations. Furthermore, the focal years of 2000-2016 remains encouraging
for such a study in Ghana because, in economic terms, Ghana is thought to have experienced
significant economic expansion as well as stagnation and even contraction. It
is understood that trade trends fluctuate with economic fortunes. It is
expected that the outcome of this study will inform the formulation and
implementation of policy regarding revenue mobilization, custom reforms and
trade facilitation.



How has the implementation of PCA impacted
customs revenue?

What are the determinants under which PCA
positively or negatively affect custom revenue? 
In what mechanism, if any, does PCA affect revenue mobilization?



study intends to adopt a difference-in-difference (DID) method of estimation. Several
new macroeconomic variables will be added to those used by Regmi (2015).  The data for the period will be accessed from
World Bank database and also related information and data will be requested
from Ghana Customs management systems.  



Bank, T. W. (2013, February 1). Post clearance audit?:
reference and implementation guide. Retrieved from

Tool On Post Clearance Audit (Pca) And Infrastructure. (2015). Retrieved from

Guidance On Post Clearance Audit (Pca) World Customs Organization One at a
time, Step by Step. (2016). Retrieved from

A.P. (2015).The Effect of Post Clearance Audit on Import Revenue Collection in
Nepal .GRIPS Policy Paper.

 Rangarirai C. (2016). An Evaluation of PCAs
and PCAs Selectivity Criteria on Informal Sector in Zimbabwe. GRIPS Policy

Venegas A.A.
(2011). Equidistance Analysis on Post-Clearance Audit Selectivity Criteria: the
cases of Mexico and Japan. GRIPS Policy Paper.