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‘Exorbitant’ luxury vehicle levy becoming ‘headache’ to gov’t

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Adnan Adams Mohammed
Pressure is mounting on government to review a new tax on vehicles with engine capacities of 3.0 litres and above introduced last year as seven associations including the Vehicle and Asset Dealers Association embarked on a demonstration to protest the luxury vehicle levy attracting the support of minority in parliament.
James Klutse Avedzi, Deputy Minority Leader, has called on the government to reduce the rate charged as luxury vehicle levy. “That rate that is being charged is too high. From the beginning, the Government can charge a very low rate and then over the years we think that it works perfectly, then gradually the rate can be increased. To pay an amount of Ghc1500 or Ghc2000 annually in addition to your roadworthy certificate is not good at all. This will also affect the Businessmen”, he alluded.

The new tax dubbed ‘luxury vehicle tax’ has generated a lot of controversies since its announcement in 2018 budget statement. Vehicles with engine capacity of 2950 to 3549 capacity are to pay GHS1, 000, while vehicles with engine capacity of 3550 to 4049 will pay GHS1, 500. Engine capacity above 4049 will pay GHS2, 000.

“We wrote reminders to them [the government] but they didn’t mind us. We held a press conference, but it was all to no avail. So the only option we had was to stage a demonstration to kick out this nuisance tax. We have three petitions, we are presenting to the Minister of Finance, Speaker of Parliament and the last to the seat of the government. If we are not seen and heard we would carry out the same demonstration across [the country],” the General Secretary of the Vehicle and Asset Dealers Association, Nana Owusu Duodu, expressed their resolve to embark on countless protests to ensure a reversal of the levy.

The government is to rake in at least GHC300million in revenue from taxes on luxury vehicles by the end of 2019.

Some economists are optimistic the government will meet the target since it already has a database of such vehicles.

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