Government to Introduce New VAT Incentives for Local Vehicle Assembly

President John Dramani Mahama has announced that Government will introduce new VAT incentives for semi knockdown vehicle assembly, with manufacturers required to meet local production thresholds before qualifying for tax exemptions.

The President said the Ministry of Finance and the Ministry of Trade and Industry were finalising discussions on a revised incentive framework aimed at promoting genuine local manufacturing.

Speaking during the commissioning of Phase Three of the Zonda Tec Ghana Limited Vehicle Assembly Plant, he said the new policy would reward companies that add substantial value within Ghana.

“We are going to introduce a percentage threshold that manufacturers must achieve locally before qualifying for the VAT exemption,” he said.

President Mahama explained that the reforms were intended to prevent abuse of the incentive regime by companies importing fully built vehicles and carrying out minimal modifications before claiming local assembly status.

“We do not want companies bringing in fully built vehicles, removing only the steering wheel and tyres, and claiming they assembled them in Ghana,” he stated.

He disclosed that the Minister for Finance would announce the incentive package in the forthcoming national budget.

The President said assembling vehicles could not be Ghana’s final destination, stressing that Government’s objective was to develop a fully integrated automotive industry supported by domestic suppliers.

He added that the revised incentives would encourage manufacturers to deepen localisation, strengthen technology transfer and expand opportunities for Ghanaian small and medium-sized enterprises within the automotive value chain.

President Mahama reaffirmed Government’s resolve to creating quality jobs, reducing dependence on imported vehicles, conserving foreign exchange and building competitive export industries for the ECOWAS and wider African markets

Richard Aniagyei, ISD