The Vehicle and Asset Dealers Association of Ghana (VADAG) says the businesses of its members are struggling as a result of introducing the new vehicle levy last year.
Addressing a press conference in Accra on Monday, the General Secretary for the group – Nana Yaw Owusu Duodu, indicated that the taxes are repulsive and regressive.
“The effect of the policy has been detrimental to the car-selling industry nationwide, such that people have discarded the idea of buying or owning vehicles such as the ones classified as ‘luxurious’; meanwhile, some owners of these vehicles are resorting to the ‘Goro Boys’ at the premises of DVLA for fake and fictitious roadworthy stickers just to drive around,” the group said.
He added that: “It is Act 969 that they are opposed to, and have served noticed to government: We the car dealers in conjunction with these other concerned groups and associations will be left with no choice but to stage a very big demonstration against this policy if it is not withdrawn within two weeks of this press conference”.
According to the group, government did not consult them before introducing and implementing the law – which has had a dire impact on their business.
Government in the 2018 budget statement introduced a ‘luxury vehicle levy’ on motor vehicles with engine capacity of 3.0 litres and above. The eco-tax was among some of the new tax policy measure introduced in the 2018 budget that sought to increase government’s tax revenues.
Commercial vehicles for goods transport or with capacity to transport more than 10 persons, tractors, and ambulances are exempted from the levy.
Owners of such vehicles pay between GH¢1,000 and GH¢2,000 when registering them, and subsequently a similar amount when renewing their roadworthy certificates.
The group further maintains that taxing vehicles such as Toyota Corolla, Toyota Avalon, Toyota Camry, Nissan Hard Body Pick-Up, KIA trade truck among others cannot be compared to the likes of Rolls Royce, Bentley, Land Cruiser V8, G-Wagon Benz, Mercedes Benz, Lamborghini and others which are very luxurious in their nature and styles.
Additionally, the group also disclosed that the country imports about 150,000 vehicles annually, with the ‘luxury vehicles’ forming about 25 percent.
The average duty payable on each these vehicles is between GH₵80,000 and GH₵500,000 and above, with government estimated to accrue between GH₵3billion and GH₵18billion depending on the type of luxury vehicle imported in the year, the group noted.
This move, they contend, denies government the very revenue that the policy seeks to gather for the state. It is their hope that the president of the country will hear their plight and withdraw the tax.