Online drivers reject GRA’s Vehicle Income Tax

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Ride hailing vehicle owners in Ghana to pay new income tax

The Ghana Online Drivers Union (GODU) of the Trades Union Congress (TUC) has said that it disagrees with the decision by the Ghana Revenue Authority (GRA) to re-introduce the payment of Vehicle Income Tax (VIT) effective January 1, 2024.

The Union said while acknowledging that as responsible citizens, its members must help to build the nation through paying taxes, their concern is that in the long run, the VIT will be borne by the drivers and not passengers.

This is contained in a statement dated December 27 signed by the National Chairman, Francis Kweku Teng.

“We are not too happy about this directive because, there was no consultation or collaboration with us, as stakeholders, just like the way the GRA imposed a VAT of 21.9% on our commission from July, 2023. Likewise, the App companies (Uber, Bolt, and Yango) did not engage us before the implementation of the VAT on 1st July 2023. There is no legislative instrument that regulates the ride-hailing sector as a Commercial entity, and therefore it is illegitimate to tax our operations now,” GODU’s National Chairman wrote.

The Ghana Revenue Authority announced on December 21 that it introduced the VIT as part of measures to expand the tax net.

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In a notice issued by the Authority, it said the levy is in accordance with Section 22 of Regulations 2016, LI 2244 which indicates that “any commercial vehicle owner that earns income from the operation of a commercial vehicle shall pay income tax quarterly”.

“We are not too happy about this directive because, there was no consultation or collaboration with us, as stakeholders, just like the way the GRA imposed a VAT of 21.9% on our commission from July, 2023. Likewise, the App companies (Uber, Bolt, and Yango) did not engage us before the implementation of the VAT on 1st July 2023. There is no legislative instrument that regulates the ride-hailing sector as a Commercial entity, and therefore it is illegitimate to tax our operations now,” GODU’s National Chairman wrote.

The Ghana Revenue Authority announced on December 21 that it introduced the VIT as part of measures to expand the tax net.

In a notice issued by the Authority, it said the levy is in accordance with Section 22 of Regulations 2016, LI 2244 which indicates that “any commercial vehicle owner that earns income from the operation of a commercial vehicle shall pay income tax quarterly”.

The Authority, therefore, urged ride-hailing companies operating in Ghana – Uber, Yango and Bolt – to update their digital platforms to incorporate the new tax requirements.

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However, GODU stated that, “We do not know how much the cost of the VIT is. We have challenges with the short code *222# to verify our vehicles. We do not know whether the update required by the GRA from the Ride-hailing companies will affect our work.”

GODU therefore appealed to the GRA to hold on to its implementation date of January 1,2024 until “proper collaborations are deepened with the Union.”

 

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