Finance minister announces special tax on luxury vehicles and high salaries

Finance minister announces special tax on luxury vehicles and high salaries

- The 2018 mid-year budget review seems unfavorable to the country's rich

society

- The finance minister has imposed new taxes on luxury vehicles and high earned salaries

- All these interventions form part of efforts to increase revenue in the country

The finance minister, Ken Ofori Attah, has presented the mid-year budget with the decision not to increase VAT from 15 percent to 21 percent.

During his presentation on the floor of parliament, Ken Ofori Attah argued that government does not need increasing VAT to rake in more revenue but rather broadening the tax and ensuring that tax compliance is tightened.

New levies have therefore been introduced to complement this move and it looks like one of these levies will rather target the rich and powerful in society.

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This tax has been placed on luxury vehicles and what this means is that all vehicles with a fuel capacity of up to 3 liters will be paying an annual 3 percent levy upon renewing their cars.

“Government proposes to introduce a luxury vehicle levy on vehicles with engine capacities of 3.0 liters and above. The levy will be paid on first registration and subsequently at annual renewal,” he said.

Also, all Ghanaians who earn salaries of 10,000 cedis and above will be paying levies of a whopping 35 percent.

Presenting the mid-year budget review to Parliament, the Finance Minister Ken Ofori-Atta said that the government will include an additional band of GHC10,000 and above per month at a rate of 35 percent.

There are arguments that these new taxes on luxury vehicles as well as high-earned salaries are a bad move by government and lazy approach on the part of the finance minister in seeking for revenue sources.

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Others are also of the argument that this move rather opens up for more cases of money laundering in the country's financial sector. The levy, according to the government will be paid on first registration and subsequently annually during renewal.

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