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The controversial luxury vehicle levy has been withdrawn by government, according to Finance Minister, Ken Ofori-Atta.
The Luxury Vehicle Tax had targeted owners of vehicles with engine capacities of 3 litres and above.
Vehicles with engine capacities of 2950 to 3549 Cubic Centimetres (3.0 – 3.5 litres) attracted a tax of ¢1,000; those with engine capacities of 3,550 to 4049 cubic centimetres (3.6 – 4.0 litres) paid ¢1,500; while above 4049cc (4.1 litres and above) paid an annual tax of ¢2000.
Background
The implementation of the luxury vehicle law commenced August 1 after Parliament passed it to impose an annual levy on vehicles with high engine capacities after it was proposed by the government in the mid-year budget review on July 19.
Provisional fiscal data on public finances for last year indicated that government had collected some GH¢21.3 million in taxes from the use of vehicles with engine capacities of 2.9 litres and above between August and December last year.
The amount is GH¢82.7 million or 79.52 per cent below the GH¢104million that was projected to be collected within the period. The projections were contained in the 2018 mid-year budget review.
This tax was however resisted by several groups including dealers of cars saying toilet pullers and commercial vans (trotros) fall within the LVL although such vehicles are not luxurious.
Withdrawal of Luxury levy
Presenting the 2019 mid-year budget review, the Finance Minister said the tax has been withdrawn and that the ruling government will find other innovative ways of raising revenue in that sector.
"We are proposing to you the withdrawal of the luxury vehicle levy. We will continue to improve compliance expand the tax net and explore other innovative sources of raising revenue," he noted.
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| Source: Peacefmonline.com/GHANA |
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