Business News Thu, 19 Jul 2018

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2018 Budget Review: Government imposes tax on luxury cars

The government has imposed a luxury vehicle tax on vehicles with a capacity of 3.0 litres and above.

Reading the mid-year budget review to Parliament, the Finance Minister, Ken Ofori Atta announced that based “on the under-performance for the first five months of 2018, we will end the year with an estimated deficit of 4.9% of GDP compared to the programmed target of 4.5%, resulting in a fiscal gap of GHs870 million, unless we immediately implement some fiscal measures; intensive tax compliance measures, New revenue measures, Intensive Conversion of NHIL (2.5%) to a straight levy, Conversion of GETFund VAT rate of 2.5% to a straight levy, Imposition of luxury vehicle tax of GH¢1,000-GH¢2,000 on non-commercial vehicles with capacity of 3.0 litres and above, review of PIT to include an additional band of GH¢10,000 and above per month at a rate of 35% and downward adjustment discretionary expenditures.”

The Finance Minister also stated that government intends to intensify tax compliance measures to make sure that they collect all taxes due the state.

According to Mr. Ofori Atta there will be no increment in VAT as earlier projected by the minority adding that government “will ensure tax compliance and plug existing leakages.”

The minister also blamed external factors for the increasing depreciation of the cedi.

“The performance of the cedi in the 18 months under. In spite of all the strong fundamentals, we have seen the cedi come under pressure. This is primarily due to external pressures. In spite of the challenges, we have put the right measures in places to make sure that we have a robust economy. The cumulative rate of depreciation of the cedi from January to June 2018 is 2.4% as against 17.2% in 2012.”

The Finance Minister also added that tax compliance will be increased by implementing a common platform for telecom revenue monitoring.

Source: starrfmonline.com

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