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Govt withdraws tax on luxury vehicles

The controversial Luxury Vehicles Levy introduced in 2018 has been withdrawn by government, Finance Minister Ken Ofori-Atta has announced.

The tax that was intended to raise revenue faced intense opposition from vehicle owners leading to a number of protests.

The implementation took effect barely a year ago on August 1, 2018 after it was passed by Parliament. The annual levy was on vehicles with high engine capacities of two thousand, nine hundred and fifty (2950) Cubic Centimeters and more.

Administrator of the Vehicle Asset Dealers Association of Ghana (VADAG), Mr. Abdul Saed told journalists in June, “The Finance Minister is confusing engine capacity with luxury vehicle. Because the latest Porsche Cayenne car is costing 250,000 dollars with 2.7 engine capacity and government is not taxing such a vehicle but Mercedes Benz, C300 that I bought 20 years ago is a luxurious car.”

The association demanded a review of the luxury levy claiming it was collapsing businesses of their members and accused government of not doing broad consultation before introducing it.

But presenting the mid-year fiscal policy review of the 2019 budget statement and economic policy and supplementary estimates of the government of Ghana for the 2019 financial year, Mr. Ofori-Atta delivered an appeasing news to owners of luxury vehicles.

“We have noted suggestions from the general public on the implementation of this tax and Mr. Speaker, as a listening Government, we are proposing to the House, the withdrawal of the levy,” the Finance Minister said on Monday.

“We will continue to improve compliance, expand the tax net and explore other innovative sources of raising revenue,” he said.

Meanwhile, government is asking parliament to approve an additional amount of GH¢6,370,355,925.82 in addition to GH¢78,771,833,602.12 contained in the 2019 budget to execute government business. This will increase the total appropriation for the 2019 fiscal year to GH¢85,142,189,527.94.

Nonetheless, the Finance Minister has assured that revenue measures including the sale of an Electromagnetic Spectrum, Telco’s Licenses renewal, gains to be derived from the realisation of assets and mineral rights, and strengthening of compliance at the ports and others, are being pursued vigorously to ensure that the revised domestic revenue target for 2019, which is some GHȼ8.3 million below the original budget projection, is not compromised.

By Isaac Essel | 3news.com | Ghana

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