Government to raise GH¢300m from tax on luxury vehicles

The government is to rake in at least 300 million cedis in revenue from taxes on luxury vehicles by the end of this year.

The tax, which forms part of the new policy measures introduced in the midyear budget review, is to help bridge the gap in revenue for the first half of the year [2018].

The figure was disclosed when Parliament passed the four bills approving the taxes introduced by the government.

300 million cedis additional revenue

The Chairman of Parliament’s Finance Committee, Dr. Mark Assibey Yeboah told his colleague MPs that the government is expecting to raise some 300 million cedis from the levy imposed on luxury vehicles with engine capacity of 3.0 litres and above.

Read: Government announces Luxury Vehicle Tax

“The annual levy will be paid to the DVLA at the time of renewing the vehicle’s annual road worthy certificate. The estimated revenue to be generated from the levy will be 300 million cedis for the period August to December, 2018,”he stated.

But the Ranking member for the Finance Committee, Cassiel Ato Forson wants the government to exclude 3.0 litre capacity luxury vehicles that are not serviceable.

“If for instance I have a car with engine capacity of 3.0 litre and above and for some strange reasons that vehicle doesn’t work or is unserviceable, I am obliged by the Act to pay for this tax in spite of the range that will be set,” he argued.

After missing the revenue target by 1.4 billion cedis between January and May this year, the Finance Minister, Ken Ofori Atta sought approval from Parliament to implement some three tax policy measures.

Read: New taxes on income, GETFund, NHIL approved by Parliament

These include; the separation of GetFund and NHIL from the VAT, charging 35 percent tax on all income above 10, 000 cedis, the introduction of levy on luxury vehicles with engine capacity 3.0 litres and above.

The House, over the weekend, passed all the amendments that will set the taxes in motion, effective next month.

VAT recalibration to raise 500 million cedis

Already, the Finance Minister, Ken Ofori Atta has indicated that the ministry should accrue about 500 million cedis from the amendments to the VAT i.e the recalibration.

The government has since reviewed its revenue expectation for this year downwards, from 51 to 50.86 billion cedis.

Source: citibusinessnews.com