The Finance Minister, Ken Ofori-Atta has indicated government plans to introduce tax component on all luxury cars with an engine capacity of 3.0 Litres.
Presenting the Mid-Year Budget Review to Parliament on Thursday July 19, the Minister said luxury cars with 3.0Litres capacity will now attract a tax component between GHS1000 and GHS2000.
“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.”
The minister also blamed external factors for the increasing depreciation of the cedi.
“The performance of the cedi in the 18 months of Akufo Addo -led government… In spite of all the strong fundamentals, we have seen the cedi come under pressure. This is primarily due to external pressures. In spite of the challenges, we have put the right measures in places to make sure that we have a robust economy. The cumulative rate of depreciation of the cedi from January to June 2018 is 2.4% as against 17.2% in 2012.”
Meanwhile, the Minister stressed that the government has also abolished numerous taxes since last year.
"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. Mr Speaker, any taxes should be to elicit socially desirable outcomes such as a better environment in this regard”.
The Finance Minister in his closing remarks affirmed that “there will be no VAT increment”.
Mark F. silveronline24/ SilverFM