Ahead of his presentation of the 2019 mid-year budget review to parliament next week, the Finance Minister Ken Ofori-Atta, has been urged to consider bringing an end to the implementation of the luxury vehicle tax policy.
The luxury vehicle tax which was introduced during the 2018 midyear budget review by the Finance Minister to help shore up domestic revenue mobilization, missed its target for the first five months of its implementation by about 80 percent.
Speaking to Citi Business News about the poor impact of the policy on the sidelines of the 2nd Ghana Tax Dialogue Forum, a fiscal policy specialist with Oxfam Ghana, Dr. Alex Ampaabeng said the policy needs to be re-engineered to make it more effective.
“The luxury vehicle tax needs to be looked into. Because the tax has failed to even meet 35 percent of its target. That to me is tax that has failed or is failing. Let’s go back to the drawing board to know where we went wrong. This will help us redesign the tax to make it better.”
About the luxury vehicle tax
The luxury vehicle tax was introduced during the 2018 midyear budget review by the Finance Minister, Ken Ofori Atta.
It affects vehicles with engine capacity above 3.0 litres, attracting an annual charge of between GHC1,000 to GHC2,000.
Seven associations including the Vehicle and Asset Dealers Association in March 2019 embarked on a demonstration to protest the luxury vehicle levy.
Members of the associations presented a petition to the Ministry of Finance expressing their misgivings over the tax.
They said the tax was going to lead to the collapse of their business as more people were now unwilling to buy their vehicles of engine capacity of at least 3.0.