Business News of Tuesday, 26 May 2020
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As the Trade Union Congress (TUC) makes a case for government to waive the Vehicle Income Tax (VIT) as a measure to support commercial operators due to the impact of the coronavirus, GhanaWeb takes an insight to what the tax entails and how the waiver could bolster operations for sector players.
Following the outbreak of the pandemic amid social distancing directives by government, public transport and commercial operators have been tasked to reduce the number of persons each vehicle carried.
The move has become necessary as a measure to curb the spread of the virus following the lifting of the three-week partial lockdown in April 2020.
What is Vehicle Income Tax?
The VIT is a measure designed by the Ghana Revenue Authority (GRA) for commercial transport operators and categorised based operators to pay for their vehicle’s tonnage and number of passengers carried.
The VIT is often paid by commercial vehicles, including taxis, intra-and inter-city buses.
The tax comes with a VIT sticker which is noticeably displayed on the windscreen of all commercial and transport vehicles. The VIT stickers are sold at the Ghana Revenue Authority’s Domestic Tax Revenue Division offices throughout the country.
Due dates for payment of VIT are often paid on 15th January, 15th April, 15th July and 15th October.
Why TUC is proposing for a waiver on the VIT
In a document published by the TUC and entitled ‘Impact of COVID-19 on Enterprises, Employment and Livelihoods in Ghana, Some Proposed Mitigating Measures’, the TUC makes a strong case for commercial transporters as they continue to make sacrifices towards the fight against COVID-19.
The Union notes; “Some informal economy operators are directly contributing toward containing spread of the virus. For example, taxi and trotro drivers are required to take fewer passengers than they are used to and still charge the same fares. This is part of the social distancing protocols designed to limit the spread of COVID-19.”
“These drivers and their owners have paid the Vehicle Income Tax (VIT) for years. It is time for government to come to their aid during this crisis. Ghana Private Road Transport Union (GPRTU) of Trades Union Congress can play a key role by helping government determine the potential losses and how they should be compensated,” the TUC said in the document.
GPRTU’s role on VIT waiver
Prior to this, the GPRTU said it initially made proposals to government requesting for an increase in transport fares due to the losses commercial operators had incurred following the coronavirus restrictions.
However, the Industrial Relations Officer of the Greater Accra branch of the GPRTU said that the proposal to waive the VIT was good intended but bemoaned the waiver will not be enough to meet their financial needs adding, the profit will go to the transport owners, leaving drivers with nothing to benefit from.
“As we speak, commercial transport drivers are struggling to make their daily sales. Many transport owners have not reduced the sales even though they are very much aware that we have reduced the number of passengers because of the coronavirus.” the Industrial Relations officer lamented.
The TUC therefore is urging for the Ghana Private Road Transport Union (GPRTU) of Trades Union Congress to play a key role by helping government determine the potential losses and how they can be compensated through the tax waiver proposal amid the losses due to the coronavirus pandemic.
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