Luxury vehicle tax ill-conceived, government must scrap it – Mahama

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The Presidential candidate of the opposition National Democratic Congress (NDC), John Mahama has said his administration will scrap the luxury vehicle tax introduced by the Akufo-Addo government if it wins election 2020.

Describing the levy as an ill-conceived one, he said its introduction has overburdened the ordinary commercial driver whose vehicle possesses the white number plate.

He argued that the amount of revenue raised so far is not even enough for the tax to be sustained.

Speaking to some drivers during his road safety tour in Accra, Mr. Mahama urged the them to exercise restraint as the NDC will not hesitate to abolish the policy.

“Not too long ago, the government introduced the luxury vehicle tax. This tax was not well thought through before it was rolled out. They should have exempted all commercial vehicles. There are commercial vehicles without the yellow plates, but rather white plates yet they carry commercial goods. Once they exceed three litres, they are charged this luxury tax. This has brought untold hardship on some of the drivers especially those who work for the companies and others.

“Just recently, I heard that government has only been able to raise GHC 25million from the luxury tax if that is the case, then they should abolish it. If they don’t, we the NDC government will abolish it when we come into power.”, he added.

The government has 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, provisional fiscal data on public finances for last year has shown.

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.

The police service has filed a lawsuit seeking an injunction to halt an intended demonstration against the luxury vehicles tax on slated for March 7.

The government expects to rake in at least 300 million cedis from the tax on luxury vehicles by the end of 2019

The tax, which forms part of the new policy measures introduced in the midyear budget review, is to help bridge the gap in revenue for the first half of the year [2018].

The figure was disclosed when Parliament passed the four bills approving the taxes introduced by the government.