The Vehicle Asset Dealers Association of Ghana (VADAG), some spare parts dealers and two driver unions are threatening to abandon their vehicles at the premises of the Ministry of Finance, the private residence of President Akufo-Addo and at the Jubilee House if government fails to withdraw the Luxury Vehicle Levy (LVL) imposed on vehicle owners and importers.
The driver unions pushing for the abolition of the levy are Concern Drivers Association and True Drivers Association. The leaders of the group say the funds paid to government in the name of Luxury Vehicle Levy is collapsing their businesses.
Speaking on Ete Sen, a breakfast show on Radio XYZ 93.1 on Tuesday, Yaw Barima, a Vice Chairman of the True Drivers Association observed that the government did not consult the driver unions before levying them.
“The government did not consult us before this act was implemented. We have written to the presidency and Ken Ofori Atta (the Finance Minister) but we have not heard anything from them…They don’t know how the levy is negatively affecting our businesses and lives, but we want to tell the government that we can’t pay the luxury tax so they should abolish it,” Barima told Piesie Okrah on the XYZ Business news.
The group will have a meeting later today to take a decision on when exactly they will protest against the government.
Barima said the sales of car dealers have dwindled because Ghanaians do not want to buy vehicles with engine capacities that attract the Luxury Vehicle tax, adding that “the spare parts dealers in Accra have also raised concerns that people are not buying vehicle engines beyond 3 litres, so they will also bring those engines when we are ready to abandon our cars.”
Luxury Vehicle Tax
According to the Luxury Vehicle Act, 2018 (Act 969), vehicle with engine capacity ranging from 2.9L to 3.0L were charged GHc1,000; capacities ranging from 3.5L to 4.0L were also charged GHc1,500, while vehicles with engine capacity of 4.5L and above were levied GHc2000.
Finance Minister Ken Ofori-Atta announced this in Parliament Thursday July 19,2018 when he presented the government’s Mid-Year Budget Review
However, the levy was not applicable to other categories of motor vehicles such as tractors, ambulances, commercial vehicles that have the capacity to transport more than 10 persons, as well as commercial vehicles for the transport of goods.
The levy is payable by owners of motor vehicles on the date of the first registration and subsequently upon renewal of the annual roadworthy certificate of the motor vehicle.
The levy is also payable on existing motor vehicles registered prior to the introduction of the Act.