Mrs Bella Ayayee Ahu, President of HOTCATT cuting the ribbon to officially open the new office of CRAG. With her are Mrs Benedicta Baabu Anokye (right), Mr Akweasi Agyeman (2nd left) and Mr Seth Ocran (left)

Waive luxury vehicle tax, car Rental Association appeals to govt

Severious Kale-Dery Dec - 17 - 2018 , 14:23 3 minutes read

The Car Rental Association of Ghana (CRAG) has petitioned government to waive the luxury vehicle tax for its members.

This is because the association contributes more than its fair share of taxes, the President of the association, Mr Seth Yeboah Ocran explained.

Speaking at the official inauguration of the secretariat of the association near the Ghana Trade Fair Authority in Accra, he said members of the association already paid a number of taxes and mentioned them as the five per cent tax plus 12.5 per cent VAT on services rendered, one per cent tourism levy and 7.5 per cent withholding tax among others.

Mr Ocran, believed that the secretariat, which was well-equipped with modern facilities will improve on how “we conduct our operations as a team, especially in the area of data collection, availability and integrity through research”.

Luxury Tax

For the first time in the country’s history, owners of luxury vehicles with engine capacities of three litres or more were slapped with a tax christened Luxury Vehicle Tax.

By that tax, the government is seeking to raise more revenue by taxing the wealthy a little more.

The Finance Minister Ken Ofori-Atta, who announced this in Parliament in July this year when he presented the government’s Mid-Year Budget Review said vehicles with engine capacities of 3.0 – 3.5 litres would attract an annual tax of GH¢1,000; those with engine capacities of 3.6 – 4.0 litres would be expected to pay GH¢1,500 annually; while 4.1 litres and above were to pay an annual tax of GH¢2000.

Operational vehicles

This, Mr Ocran said, directly affected most of its members operational vehicles such as the 4x4s, pickups, buses and executive salon cars, adding, “we simply cannot survive as business if government continues to demand that we pay this luxury vehicle tax.”

He said since the tax exempted commercial vehicles, it stood to reason that since members of the association used their vehicles for commercial purposes, their vehicles should also be exempted from the tax.

High cost

He said in addition to all the taxes members of the association paid, they were also faced with high cost of insurance premiums, high cost of finance and bank charges and high maintenance cost due to the bad roads to tourism destinations in the country.

Contribution of association

He recalled the contribution the association had played over the years towards tourism development and growth in the country and pledged that the association would continue to do its part to drive tourism and contribute to the development of tourism.

Ghana Tourism Authority

Responding to some of the concerns raised by Mr Ocran, the Chief Executive Officer of the Ghana Tourism Authority, Mr Akwasi Agyeman said the authority saw CRAG as a strategic partner.

He said the authority together with CRAG were in talks to finding an amical solution to the issue of luxury vehicles, drawing the attention of the association that the government’s position was that CRAG members should accept to use commercial number plate in order to enjoy the exemption.