Cabinet has approved the much talked about Automobile Bill to officially give a legal framework for the assembling of vehicles in the country.
For this reason, import duties on new passage vehicles, SUVs and other trucks will be increased to 35 percent.
Launching the Automobile Bill, Trade Minister, Alan Kyeremanteng detailed the policy framework for the bill explaining that the move is to – in the long run – reduce the import of vehicles which amount to 85,000 each year costing over 1 billion dollars. What this also means is that all investors venturing into the establishment of vehicle assembly plants will enjoy corporate tax holidays.
According to Mr. Kyeremanteng, “The initial scope of the Ghana Automotive Development Policy is to provide the necessary framework to establish assembly and manufacturing capacity in Ghana. Fiscal incentives on new vehicles for registered assemblers will include a corporate tax holiday of 5 years for enhanced SKD Registered Assemblers”.
To this end, a stable tariff regime that ensures that at any point in time, the applicable duty and waivers are maintained at a total rate of 65 per cent differentiation in favour of locally assembled vehicles.
Tax on overage vehicles
In the wake of the policy, the Trade Ministry has imposed a 35 per cent of import taxes on the importation of new and used vehicles.
This tax imposition will affect overaged vehicles, Salvaged and Flooded Vehicles and new cars without destination certificate certifying that the vehicle is produced for the Ghana market.
Justifying the decision for tax rebates, Alan Kyeremanteng explained that the move is to encourage manufacturers to focus on producing longer runs of higher volume models locally while importing other lower-volume models at concessionary duty rates from the same Global OEM registered in the Auto Program.
Speaking to JoyBusiness, General Manager for Kantanka Vehicles, Francis Kudjorjie explained that the policy will “increase the production of vehicles and set Kantanka on the edge of becoming a market leader in Ghana”.
According to him, the company sees this automobile policy as a game-changer for a local car assembly firm like Kantanka.
Meanwhile, the government has established an auto desk at the Ministry of Trade and Industry for the registration of auto assemblers and component manufacturers. Also, an inter-ministerial facilitation team composed of ministers in key sectors for the implementation of the policy has been set up.
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Source: JoyBusiness
