He said the tax would be imposed on luxury vehicles with a capacity of 3.0 litres and above.
Reading the mid-year budget review to Parliament, the Finance Minister said “on the under-performance for the first five months of 2018, we will end the year with an estimated deficit of 4.9 percent of GDP compared to the programmed target of 4.5 per cent, resulting in a fiscal gap of GHc870 million, unless we immediately implement some fiscal measures; intensive tax compliance measures, New revenue measures, Intensive Conversion of NHIL (2.5%) to a straight levy, Conversion of GETFund VAT rate of 2.5% to a straight levy, Imposition of luxury vehicle tax of GH¢1,000-GH¢2,000 on non-commercial vehicles with capacity of 3.0 litres and above, review of PIT to include an additional band of GH¢10,000 and above per month at a rate of 35% and downward adjustment discretionary expenditures.”
The Finance Minister also stated that government intends to intensify tax compliance measures to make sure that they collect all taxes due the state.
He explained the measures was to ensure that the country meets its fiscal deficit target of 4.5 percent and ensure that the country exit the International Monetary Fund (IMF) programme.
"We are converting the National Health Insurance of 2.5 percent to a strict levy of 2.5 percent. Mr Speaker, we are converting the GETFund Value Added Tax rate of 2.5 percent to a strict levy of 2.5 percent."
"Mr Speaker, VAT will thus be maintained at 12 and half percent.
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