Government must scrap nuisance luxury vehicle tax – Economist

A Senior Economics Lecturer at the Kwame Nkrumah University of Science and Technology (KNUST), Katakyie Dr. Eric Oteng Abayie has asked government to completely do away with the Luxury Vehicle tax that it intends to review in the mid-year budget, describing it as a nuisance.

In his submission on Kumasi-based Pure FM monitored by MyNewsGh.com, the Senior Economist stated that the government failed to factor the elasticity of the policy in its considerations and implementation.

“Kojo, the government achieved only 3% of its intended revenue, that is bad and it looks like they didn’t do extensive research before introducing the luxury vehicle tax. In fact, if we have a way of advising the gov’t, I will say this is a nuisance tax. It is just as picking low Cheerios or low mangoes because they are close to the ground. It will not help the nation, the review must be complete scrapping of the policy and nothing else.” He revealed.

He explained that, already the citizens and owners of these big cars are overburdened and tired of taxes on cars listing Petrol taxes, and renewable taxes as an example adding that, they use these cars not because of the aesthetic value of it but due to the bad road systems.

“It is not an efficient tax and it is unnecessary creating burden to people creating extra cost to people using it for agricultural purposes.” He stressed, revealing that the tax has a tendency to create corruption due to its discretionary nature.

“If you read the luxury vehicle tax law, the last chapter says everybody can run to the Minister and asked to be removed from it. A discretionary tax Kojo is dangerous and can opt for corruption.

Also government in itself use these big cars but I doubt they pay the levies on it. Kojo, it eventually patronizes big people and must be scrapped completely.” He explained.