Minister for Finance, Ken Ofori Atta has disclosed that government has put in place plans to review the luxury vehicle tax introduced in the 2018 national budget.
Under the law vehicles with engine capacity above 3.0 Litres are charged fees ranging from GHS1,000 and above.
The law has been criticized by car dealers and vehicle importers, arguing that it has increased their cost of doing business.
Speaking at a press briefing, Finance Minister Ken Ofori-Atta assured that government has listened to the concerns of Ghanaians and will make changes to the law in the mid-year budget review scheduled for next month.
"We have received quite a bit of feedback from the implementation of that but we did go through a lot of stakeholder discussions before that occurred and so we are almost coming to a year of implementation and therefore we look to review it so that concerns are taken care of but the law is there and I believe is a good law.."
Luxury tax yields GH¢21.3m in 5 months
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, this is according to the provisional fiscal data on public finances for 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.
The implementation of the vehicle luxury tax begun in August 2018 as a new policy to help raise more revenue.
A Fiscal Policy Specialist at Oxfam Ghana, Dr Alex Ampaabeng, in an interview with the GRAPHIC BUSINESS on April 9 in Accra observed that the development brought to fore the country’s inability to undertake proper consultation before a new system or initiative was introduced.
“The revenue collected, although is very low compared to the government’s projection, offers a foundation for future decisions and most importantly, a basis for national conversation around this tax.
NDC will abolish ill-conceived luxury vehicle tax – Mahama
The Presidential candidate of the opposition National Democratic Congress (NDC), John Mahama says when voted into power in 2020 his administration will scrap the luxury vehicle tax if the Akufo-Addo government fails to do so.
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 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. â€
 “Just recently, I heard that the 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.
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