Define Vehicle Income Tax law-GREDA

Monday March 14, 2011

By Edmund Mingle
Real estate developers across the country have asked the Ghana Revenue Authority (GRA) to clearly define the Vehicle Income Tax (VIT) law, which they say is being misinterpreted against them.According to them, the misinterpretation of the law by the Police was seriously affecting their operations.
They say although the VIT law was binding on only commercial vehicles, the police was demanding estate developers also purchase the stickers for their operational vehicles.
Interacting with journalists at the weekend, a group of managers of real estate firms said the situation was hindering their operations.
Their refusal to heed to the demand of the police, which they deem illegal since it was in contravention of the VIT law, has led to confrontation between the estate developers and the police.In many instances, trucks and water tankers carrying building materials to construction sites have been detained by the police, resulting in delays in operations and additional cost.
“The corporate taxes we pay cover our operations, so why should we be asked to pay VIT again,” they asked. According to them, the cost of the stickers, which sell for GHc 60 every three months, was not a problem to them, but the right thing must be done.
“Our vehicles are not commercial vehicles; we are exempted from the tax,” they noted.

When contacted over the issue, Dr. Alexander Tweneboah, President of the Ghana Real Estate Developers Association (GREDA), confirmed the disturbing nature of the matter.
“This is frustrating the operations of our members,” he said.
He said it was important that the GRA clarified the issue to let the developers know if the VIT law binds privately registered vehicles too.
“Otherwise they should educate the police to let them stop harassing our members,” he stated. Asked about the measure the association was adopting to address the issue, he said GREDA was in the process of writing formally to lodge a complaint with the GRA for the necessary clarification.
A notice from the Domestic Tax Revenue Division of the GRA about the purchase of VIT sticker reminded “all Commercial Transport Operators that Vehicle Income Tax (VIT) for the first quarter ( 1st January – 31st March, 2011) are on sale at the Domestic Tax Revenue Division (former IRS) District Offices throughout the country.”
The Vehicle Income Tax, introduced in 2003, is collected from commercial vehicle operators on quarterly basis.
The VIT law makes it obligatory for commercial vehicle operators to buy VIT stickers from any IRS offices on a quarterly basis, and the stickers are required to be pasted on the windscreen of commercial vehicles.
In addition, the law requires the police to undertake monitoring to ensure compliance.