Car assembling plants to get tax holidays following launch of Automobile Bill
Cabinet has approved the Automobile Bill to officially give a legal framework for the assembling of vehicles in the country.
Per the approval, import duties on new passage vehicles, SUVs and other trucks will be increased to 35 per cent.
The Minister in charge of Trade, Alan Kyeremanteng who launched the bill explained that the bill will 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.
He said: “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.
The Ministry has also imposed a 35 per cent of import taxes on the importation of new and used vehicles.
This will affect overaged vehicles, Salvaged and Flooded Vehicles and new cars without destination certificate certifying that the vehicle is produced for the Ghana market.
The Minister emphasised 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.
By: Rashid Obodai Provencal