All luxury cars with an engine capacity of 3.0 litres and above, will attract a tax of between GHS1000 and GHS2000, Finance Minister Ken Ofori-Atta has said.
Presenting the mid-year budget review to parliament on Thursday, 19 July, Mr Ofori-Atta told the house that: “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 GHS1,000 – GHS2,000 on non-commercial vehicles with capacity of 3.0 litres and above, review of PIT to include an additional band of GHS10,000 and above per month at a rate of 35% and downward adjustment discretionary expenditures.”
Mr Ofori-Atta also said categorically that there will not be any increase in Value Added Tax (VAT) as widely speculated.
It had been reported by some media houses that the government intended increasing VAT from 17.5% to 21.5%.
The speculation was sparked by Mr Gabby Asare Otchere-Darko, nephew to President Nana Akufo-Addo, on social media.
The Minority in Parliament and the main opposition National Democratic Congress took issue with the government over the speculation and vowed to fight any such tax increase.
However, Mr Ofori-Atta said that there will be no increase in VAT and urged the opposition to “stop taking directions on economic policies from social media”.
“Mr Speaker, last year we abolished numerous taxes. The scale of tax reductions had never been implemented in the 60 years of Ghana’s economic history since independence. The evidence shows that the economy has responded positively to these tax cuts. What is also clear to us Mr Speaker is that we are not collecting as much as we should.
“The solution to this problem, however, is not necessarily, imposition of many taxes, we must first make sure that we ensure compliance with existing tax laws, plug the leakages in the existing system, ensure value-for-money for the expenditures that government undertakes and ensure Mr Speaker, that the wealthy also pay their fair share. Me Speaker, any taxes should be to elicit socially desirable outcomes such as a better environment in this regard.
“I’ll like to inform the house Mr Speaker that there will be no increase in VAT”, Mr Ofori-Atta stressed.
Source: Class
