Tax analyst applauds govt for introducing Vehicle Income Tax

A Tax Analyst, Francis Timore Boi, has lauded the government’s move to introduce the Vehicle Income Tax (VIT).

The Ghana Revenue Authority (GRA) announced that effective January 1, 2024, ride-hailing vehicle owners will be taxed.

However, this has been met with resistance from the Online Drivers Union, who lament that as key stakeholders, the GRA failed to engage them before introducing the levy.

Speaking to Citi News, Mr. Timore Boi insisted that the Vehicle Income Tax was necessary to generate much-needed revenue for the government.

“I think it’s perfectly in the right direction; for me, it’s long overdue because commercial car owners are supposed to pay tax since they earn income. In 2021, when we made the law, we never thought that private cars could even be used for commercial purposes like we are seeing today. And then the advent of Uber and all those ride-hailing apps came. Because these private cars have not been branded as commercial, they never pay for the Vehicle Income Tax. I think the tax enforcement on January 1, 2024, is in the right direction,” he said.

The Ghana Revenue Authority (GRA) on December 21 issued a notification to ride-hailing vehicle owners regarding the implementation of a new tax policy called the Value Income Tax (VIT), effective from January 1, 2024.

As per Section 22 of Regulations 2016, LI 2244, the GRA specified that “any commercial vehicle owner that earns income from the operation of a commercial vehicle shall pay income tax quarterly.”

The Authority has advised ride-hailing companies such as Uber, Yango, and Bolt operating in Ghana to update their digital platforms to integrate the new tax requirements.

Guidelines for compliance include obtaining a soft copy of the VIT sticker, validating the sticker’s authenticity with the GRA, and submitting a quarterly list of all vehicles on their platforms to the GRA.