Commercial drivers to pay taxes on earnings

Commercial vehicle drivers may soon have to pay income tax on their earnings just as their counterparts in the public sector.

Mr Joseph Kwabena Oppong, Chief Inspector of Taxes (CHIT) of the Internal Revenue Service (IRS) dropped this hint at the launching of the New Commercial Vehicles Income Tax Sticker System at Ho on Thursday.

Mr Oppong, who was answering questions, said there was every justification to make the drivers pay tax on their earnings because the vehicle income tax system related to incomes earned by owners of commercial vehicles in respect of their vehicles, which excludes their drivers.

He said public sector drivers had had to question the exclusion of their counterparts in the private sector from paying tax on their incomes even though they were perceived to be earning more from their operations.

Mr Oppong said the new lower vehicle income tax levels were aimed at making payment easier for the vehicle owners and an incentive to many vehicle owners who hitherto were not paying.

He explained that if the IRS went by studies it did on the various routes and incomes earned by the commercial vehicle owners, they would have to pay higher than they were paying previously.

For example the old quarterly tax for taxis and cars on hire and tro-tros up to 19 seats was 60,000 cedis, but under the new sticker system, which would come into effect from July 1, this year, they would be required to pay 48,000 cedis every quarter.

All other categories of commercial vehicles would pay lower than they were paying now according to figures released by the IRS at the launch.

Mr Oppong explained that commercial vehicle owners would nevertheless have to file final returns on their yearly incomes to the IRS as the new vehicle income tax Sticker System would only be a deposit.

Mr Oppong advised commercial drivers to get their vehicle owners to patronise the sticker system in order to avoid being prosecuted together with other vehicle-owners who would refuse to buy the stickers.

He said by the new law on the vehicle sticker system, only the police and not the Ghana Private Road Transport Union (GPRTU) guards would be checking to ensure that vehicles possessed the stickers.

Mr Oppong said the GPRTU guards could, however, limit their operations to the lorry parks to ensure that every vehicle possessed the stickers to ensure that the GPRTU earned its commission on the sale of the stickers.

He said unlike formerly the transport bodies would have to pre-pay for the stickers, which they would then sell to their members for a commission of two-and-a half percent.

Mr George Kofi Boateng, Special Assistant to the Volta Regional Minister Mr Kwasi Owusu-Yeboa was optimistic that the sticker system would prove to be an efficient system for maximising tax revenue from the commercial vehicle sector.

He said this was because the lower levels agreed on were the result of consultations between the IRS and the Ghana Private Road Co-ordinating Council.

Mr Boateng suggested to the IRS and the GPRTCC to mount intensive public education for vehicle owners and drivers on the new system.

He called for an increase in the commission of two-and-a-half percent to encourage the various Transport Associations to maximise their sales.