Govt's decision to scrap luxury vehicle tax is strange - Lecturer

By Wendy Amarteifio
luxury vehicle
Law lecturer at the University of Ghana, Dr Ebo Turkson

A law lecturer at the University of Ghana, Dr Ebo Turkson has described as strange government's decision to scrap the luxury vehicle tax introduced in 2018.

The Finance Minister, Ken Ofori Atta on July 29 during the mid-year budget review announced the withdrawal of the tax.  According to him, the decision was based on suggestions from the general public on the implementation of the tax.

Speaking to Starr FM in reaction to the withdrawal of the tax, Mr Turkson said it is difficult to understand the motive behind the withdrawal when the government needs additional revenue to develop the country. He further questioned the level of consultations done by the government prior to announcing the new levies and taxes.

''I find it very strange that we are looking for additional money to spend yet certain taxes we have imposed have been withdrawn.I find it extremely difficult to understand why the government decided to withdraw the luxury vehicle tax. The tax was not a luxury vehicle tax, it was for cars that were carrying large engine capacity which environmentally was a good policy. There was no reason why we had to withdraw those tax because these vehicles make use of more fuel, they pollute the environment . The way this government quickly withdraws taxes that they have imposed makes it looks like they do not do enough consultations and analysis to impose some of these tax''.

About the Luxury vehicle tax 

Parliament passed the Luxury Vehicle Levy on 1st August 2018 to impose an annual levy on vehicles with high engine capacities.

Vehicles with engine capacity of two thousand, nine hundred and fifty (2950) Cubic Centimeters and more were required to pay respective levies.

The Driver and Vehicle Licensing Authority (DVLA) was authorized by the Law to collect the levy on behalf of the government.

The following categories of vehicles were exempt from the levy:
a) tractors;
b) ambulances;
c) commercial vehicles that have the capacity to transport more than ten persons;
d) commercial vehicles for the transport of goods.