The Ghana Private Roads Transport Union (GPRTU) has threatened to raise transport fares once again as a result of the newly imposed Value Added Tax (VAT), which is driving up the price of spare parts.

Finance Minister, Ken Ofori-Atta, while presenting the 2023 budget in parliament on Thursday, November 24, 2022, announced a 2.5% increase in VAT, as part of government’s several means of “aggressively mobilising domestic revenue” that will be used to “directly support our [Ghana’s] roads and digitalization agenda.”

Following the minister's announcement, many Ghanaians, particularly traders, were dissatisfied because the 2.5% increase meant a jump in VAT from 12.5% to 15%, a development they are aware will have a significant impact on the costs of goods and services.

Unhappy about the upward adjustment, a member of the GPRTU, Samuel Amoah, in an interview with the media, stated that spare parts imported into Ghana are liable to VAT.

A GPRTU member, Samuel Amoah, reacting to the development, voiced his displeasure over the upward adjustment in a media interview and claimed that because imported spare parts are subject to VAT, his organisation would inevitably bear the brunt of the increase.

According to Mr. Amoah, importers of spare parts will soon be compelled to raise their prices, which will have an impact on the cost of maintaining GPRTU vehicles and ultimately on transportation costs.

Mr Amoah noted that the GPRTU considers four factors before increasing fares, including the increment in spare parts, lubricants, taxes, and fuel prices.

“Anytime we want to increase our fares, we go down there to check all those components to see how much it has increased percentage-wise before we also do our calculation.” he said.

Transportation costs have increased by more than 40% since the start of 2022, and the GPRTU attributes this rise in part to the ongoing rise in the cost of petroleum products.

In January of this year, petrol and diesel were trading at an average of GH¢6.9 and GH¢7.0 per litre, respectively, at the local pumps.

Currently, a litre of diesel is selling at GH¢20.25, whiles a litre of petrol is GH¢16.07.

However, the Chamber of Petroleum Consumers (COPEC) is projecting a decline in the prices of petrol and diesel at the pumps.

Source: The Independent Ghana