Ghana Launches Luxury Vehicle Tax

July 20, 2018 Taxation in Ghana

Luxury car tax in GhanaACCRA – Despite expectations of a VAT hike, Ghana has surprised pundits by enacting a tax on luxury vehicles.

On July 19th the government of Ghana announced that it would be enacting a new tax on vehicles with large-capacity engines, with the new tax to be billed as a luxury vehicle tax.

The latest tax would be set at GHS 1 000 for cars with engine capacities of between 3.0 litres and 3.5 litres, while cars with capacities of between 3.6 litres and 4.0 litres would see a tax of GHS 1 500, and all cars exceeding 4.1 litres would face a tax of GHS 2 000.

The taxes would be applicable to all non-commercial vehicles, and would need to be paid each year.

The new tax is understood to have come as a surprise to many experts who believed that the government would announce a hike to the rate of VAT, instead of a new targeted tax.

The VAT was expected to be raised from the current rate of 17.5 percent, to a rate of 21.5 percent.