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An economist with the University of Ghana Business School (UGBS), Dr Patrick Asuming has suggested to the government to reintroduce the luxury vehicle tax or other tax measures to save the economy from collapsing.
Speaking to Asaase News, Asuming said the government can consider addressing some of the teething challenges that led to the suspension of the luxury vehicle tax as it weighs alternatives to raise revenue.
“We really need to have a general discussion about how we raise more progressive taxes, so it was quite disappointing that when we introduced the luxury vehicle tax, for no clear explanation, it was taken back,” Asuming said.
“Are you suggesting that we should bring back the luxury vehicle tax?” the host of The Asaase Breakfast Show Kwaku Nhyira-Addo asked.
“Even if it’s not the luxury vehicle tax, there has to be additional tax measures that ensure that people are paying more,” he responded.
“Of course, there were difficulties in terms of, what type of vehicle was defined as luxury vehicle, that means you have to address that challenge,” Asuming said. “In every country, when you pass a law at times, there will be challenges, so you fix the challenges as the implementation goes on.”
“You don’t scrap the tax because of a challenge with implementation.”
Watch the full interview in the attached video:
About the luxury vehicle tax
The luxury vehicle tax was introduced by the government in August 2018 as a new policy to help raise more revenue but was subsequently scrapped in 2019.
Vehicles with engine capacity of 2950 to 3549 Cubic Centimetres were required to pay US$193.78 (GHC1,000) while those with engines between 3,550 to 4049 cubic centimetres paid $290.68 (GHC 1,500) per annum.
Vehicles with engine capacities above 4049cc paid US$387.57 (GHC 2,000).
Exempted from the levy were tractors, ambulances, commercial vehicles that have the capacity to transport more than 10 persons and commercial vehicles for the transport of goods.
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Source: Asaase Radio
