Government to introduce local assembly threshold for VAT exemption – President Mahama

President John Dramani Mahama has announced that the government will introduce a minimum local assembly requirement for vehicle manufacturers seeking to benefit from VAT exemptions under new incentives for semi-knockdown vehicle assembly.

He said the requirement is intended to ensure that manufacturers genuinely assemble vehicles in Ghana rather than import almost-complete vehicles and carry out only minor work locally.

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Speaking at the commissioning of the Zonda Tec's third vehicle assembly plant on Tuesday, September 15, 2026, President Mahama said the Ministry of Finance and the Ministry of Trade, Agribusiness and Industry were finalising discussions on the new incentives.

“I wish to inform you that the Ministry of Finance and the Ministry of Trade, Agribusiness and Industry are finalising their discussions on the incentives for semi-knockdown automotive assembly,” he said.

According to the President, the government will set a minimum percentage of work that must be completed locally before a manufacturer can qualify for the VAT exemption.

“We are going to introduce a percentage which you must achieve to be able to qualify for the VAT exemption,” Mahama stated.

He explained that the policy is intended to prevent manufacturers from bringing vehicles into the country almost fully assembled and carrying out only minor adjustments before describing them as locally assembled vehicles.

“We don't want manufacturers who bring the whole car, they just remove the steer and the tyres, and they bring it here, put the tyres and put the steer, and say we've assembled this vehicle in Ghana,” he said.

President Mahama stressed that a certain level of assembly must take place in Ghana for manufacturers to benefit from the tax incentive.

“A certain percentage of assembling must take place locally for you to qualify for the VAT exemption,” he added.

He said the Ministry of Finance would present details of the incentive to Parliament as part of the upcoming Budget.

“The Ministry of Finance will soon read the budget to Parliament and that incentive will be read out in the coming budget,” Mahama said.

ANAS/MA

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Source: www.ghanaweb.com
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