By Kofi Ahovi
The government is planning to phase out exemptions on vehicle imports for health and teaching services in the country by 2011. This is to check the amount of revenue being lost to exemptions.
The government hopes to save at least US$40 million after the phasing out of the exemptions. According to the 2010 budget, there would be a cash limit of GH¢2,000 per individual exemption.
The special permits granted to personnel of the health and teaching services on vehicle imports were intended to be temporary. The government plans to use this measure to ensure fairness and equity to all taxpayers in both the public and private sectors.
Parliamentary exemptions and special permits would be time-bound and renewable subject to the recommendation of the Minister for Finance and Economic Planning to further ensure fairness and equity, it is proposed that parliamentary exemptions for duties on vehicles would be subject to an absolute currency limit per vehicle, per beneficiary, and would also be time bound.
The absolute currency limits of GH¢2,000 would be reviewed periodically. The absolute cash limit is introduced to ensure that the “tax expenditure” benefits or the revenue loss for those who import higher-valued vehicles is not greater than those who import low-valued vehicles.
These special permits and parliamentary exemptions tend to narrow the tax base and undermine the effective progressivity, fairness and efficiency of the tax system and have tended to reduce government revenue.
Generally, import duty is imposed on vehicles depending on the type. All motor vehicles with cylinder capacity not exceeding 1900 attract an import duty rate of 5%. Motor vehicles of cylinder capacity exceeding 1900 but not exceeding 3000 attract an import duty of 10%. Other vehicles of cylinder capacity exceeding 3000 and those designed for traveling on snow, golf cars and similar vehicles attract an import duty of 20%.
Commercial vehicles for the transport of goods such as trucks, tippers and lorries attract a duty of 5%. Commercial buses with seating capacity of above 30 passengers, workshop vans, breakdown vehicles, mobile showrooms, ambulances, hearse and motor bikes are exempted from the payment of import duty.
All these type of vehicles attract a Value Added Tax (VAT) rate of 12.5%, except ambulances, which are VAT-exempt.
The government is planning to phase out exemptions on vehicle imports for health and teaching services in the country by 2011. This is to check the amount of revenue being lost to exemptions.
The government hopes to save at least US$40 million after the phasing out of the exemptions. According to the 2010 budget, there would be a cash limit of GH¢2,000 per individual exemption.
The special permits granted to personnel of the health and teaching services on vehicle imports were intended to be temporary. The government plans to use this measure to ensure fairness and equity to all taxpayers in both the public and private sectors.
Parliamentary exemptions and special permits would be time-bound and renewable subject to the recommendation of the Minister for Finance and Economic Planning to further ensure fairness and equity, it is proposed that parliamentary exemptions for duties on vehicles would be subject to an absolute currency limit per vehicle, per beneficiary, and would also be time bound.
The absolute currency limits of GH¢2,000 would be reviewed periodically. The absolute cash limit is introduced to ensure that the “tax expenditure” benefits or the revenue loss for those who import higher-valued vehicles is not greater than those who import low-valued vehicles.
These special permits and parliamentary exemptions tend to narrow the tax base and undermine the effective progressivity, fairness and efficiency of the tax system and have tended to reduce government revenue.
Generally, import duty is imposed on vehicles depending on the type. All motor vehicles with cylinder capacity not exceeding 1900 attract an import duty rate of 5%. Motor vehicles of cylinder capacity exceeding 1900 but not exceeding 3000 attract an import duty of 10%. Other vehicles of cylinder capacity exceeding 3000 and those designed for traveling on snow, golf cars and similar vehicles attract an import duty of 20%.
Commercial vehicles for the transport of goods such as trucks, tippers and lorries attract a duty of 5%. Commercial buses with seating capacity of above 30 passengers, workshop vans, breakdown vehicles, mobile showrooms, ambulances, hearse and motor bikes are exempted from the payment of import duty.
All these type of vehicles attract a Value Added Tax (VAT) rate of 12.5%, except ambulances, which are VAT-exempt.
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