‘Fraudulent’ luxury tax must be reviewed – Vehicles and asset dealers decry

A group of car and spare parts dealers today March 7, 2019 demonstrated through some principal streets of the capital to some key governmental institutions to present their petition with regards to the imposition of tax on vehicles with high engine capacities.

The group made up of the Vehicle and Asset Dealers Association (VADA), the National Concerned Spare Parts Dealers Association (NCSPDA), True Drivers Union (TDU), Concerned Drivers Association (CDA), and many others petitioned the Finance Ministry, the Parliament and the presidency to review the luxury vehicle tax imposed on vehicles with a 3.0 engine capacity and above.

According to their petition, government’s breakdown of the engine capacities and required corresponding rates is as follows;

Vehicles with an engine capacity of 2.9 – 3.0 will pay an annual levy of GHC1000, 3.5 – 4.0 has been levied GHC1500 and 4.5 and above, GHC2,000.

This according to the coalition is “nothing but a rip off, of we the importers and by extension fellow Ghanaians at large.”

They, however, maintain that if the president does nothing about the ‘criminal’ imposition of levies which is killing their businesses they would continue to demonstrate in all the 16 regions of the country and proceed to court if their two-week ultimatum given to government elapses without any probable solutions.

Background

The Ghana Revenue Authority (GRA) has said the implementation of the law to levy vehicles with high engine capacities takes effect from Wednesday, 1st August 2018.

Under the new tax regime, vehicles with engine capacity of 3.0 litres and more are required to pay respective levies, the GRA said in a release Monday.

“The Driver and Vehicle Licensing Authority (DVLA) is authorised by the Law to collect the levy on behalf of Government. With effect from Wednesday, 1st August 2018, the levy shall be paid on the registration of vehicles and subsequently on or before the annual renewal of the roadworthy certificate of such vehicles, with engine capacities listed above," GRA stated in the release.

The levy is also imposed on vehicles existing prior to the passage of the Law with the above-listed cubic centimetres. Also, vehicles whose roadworthiness certificates have already been renewed prior to the passage of this Law in 2018 will pay the levy starting from their next renewal date in 2019.

Meanwhile, the following categories of vehicles are exempt from the levy:

a) tractors; b) ambulances; c) commercial vehicles that have the capacity to transport more than ten persons; d) commercial vehicles for the transport of goods; e) other exemptions as may be prescribed by the Minister responsible for Finance.