National Democratic Congress (NDC) Presidential Candidate, John Dramani Mahama, on Thursday announced that he will abolish the luxury vehicles tax introduced by government to tax vehicles with bigger engine capacities.
Speaking to executives and drivers of the Neoplan station local GPRTU in Accra in Twi dialect, Mr. Mahama argued that new tax is itself not generating that much revenue for government and wondered why it would not scrap it.
“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. ”
“Just recently, I heard that 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
The tax affects all vehicles including commercial vehicles, farm tractors, pick up vehicles among others.
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, provisional fiscal data on public finances for last year has shown.
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 police service has filed a lawsuit seeking an injunction to halt an intended demonstration against the luxury vehicles tax on slated for March 7.
The government expects to rake in at least 300 million cedis from the tax on luxury vehicles by the end of 2019.
The tax, which forms part of the new policy measures introduced in the midyear budget review, is to help bridge the gap in revenue for the first half of the year .
With many complaining about the impact of the tax on their operations especially commercial drivers and small business owners who use pick-up vehicles, Mr. Mahama says, the next NDC administration will scrap the tax if government does not abolish it before 2020.
The NDC Leader was on a pre-Easter your of selected lorry parks to advocate for an accident-free Easter, advising and encouraging the drivers to take greater responsibility for the safe arrival of their passengers and themselves at their destinations.
At the Kaneshie lorry park, President Mahama promised the local GPRTU executives that his government will work with them to construct a modern bus terminal at Kaneshie.