For the first time in the country’s history, owners of luxury vehicles with engine capacities of 3.0 litres or more would pay an annual tax on their vehicles.
This was announced by the Finance Minister, Ken Ofori Atta, whiles presenting the Mid-Year Budget Review yesterday, in Parliament.
According to him, tax of GH¢1,000 to GH¢ 2,000 would be imposed on luxury vehicles, and stressed that Commercial vehicles would be exempted from the policy.
“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 GH¢1,000-GH¢2,000 on non-commercial vehicles with capacity of 3.0 litres and above, review of PIT to include an additional band of GH¢10,000 and above per month at a rate of 35% and downward adjustment discretionary expenditures,” he mentioned.
The levy, according to him, would be paid on first registration and subsequently at annual renewal.
Policy Measures on Payroll
Touching on payroll, the Finance Minister disclosed that government is evaluating options to outsource the payroll processing for its employees.
This, according to him, is aimed at addressing the Public Sector Wage Bill and its crowding out effect on public expenditure.
“The overall goal is to achieve the convergence criterion of 35 percent wage bill to tax revenue, in the West African Economic and Monetary Union (WAEMU) from the current 48 percent,” he stressed.
By: Emmanuel Yeboah Britwum