Ride-hailing chauffeurs in Ghana are pressing back versus a strategy by the nation’s profits authority to enforce a automobile earnings taxarguing that it would put a stress on their earnings.
Part of the brand-new tax notification, which is anticipated to enter into result on January 1, 2024, mentions that “any business car owner that makes earnings from the operation of an industrial car will pay earnings tax on a quarterly basis.”
Ride-hailing business– Uber, Bolt, and Yango– are anticipated to confirm that their chauffeur partners have actually paid VIT before permitting them to run on their platforms. Per the notification by the Ghana Revenue Authority (GRA), ride-hailing business are needed to require a soft copy of the VIT sticker label from their chauffeurs, confirm the credibility of the sticker labels with the GRA, and send the list of all lorries on their platforms quarterly to the GRA.
A number of chauffeurs who spoke with TechCabal stated the brand-new tax was a surprise as they currently pay a commission to the ride-hailing business. The chauffeurs argue that the tax concern must fall on ride-hailing business rather of specific motorists. Bolt and Uber charge a 20% commission on every journey, while Yango supposedly takes 18%.
“Many of us currently battle due to the present commission structures,” Kwame, an Uber motorist, informed TechCabal. “Adding another layer of tax on top of fuel expenses and cars and truck upkeep resembles including more to our issues.”
“They are cheating us,” stated John, another ride-hailing chauffeur. “I understand numerous motorists sitting in the house due to the fact that they aren’t pleased with the commission taken by the ride-hailing business. If Ghana Revenue Authority enforces a brand-new tax on us, how will it impact the fares?”
According to a breakdown on GRA’s site, ride-hailing automobiles fall under “Class A” and will pay 12 Ghana Cedis quarterly, amounting to 48 GHC each year. The firm mandates all industrial automobile operators to purchase VIT sticker labels from any Domestic Tax Revenue Office. The sticker label is anticipated to be pasted on the lorry’s front windshield.
The brand-new guideline is Ghana’s most current effort to enforce taxes on ride-hailing business. In April, Ghana’s Driver and Vehicle Licencing Authority (DVLA) presented the “Digital Transport Guidelines,” which enforced a levy on every ride-hailing journey.
The levy indicated that all 5 ride-hailing companies running in Ghana would pass off a surcharge of one Ghana cedis traveler utilizing their platforms. The relocation was slammed by residents who currently felt the pinch of a flagging economy. Ghana has among the most affordable tax-to-GDP ratios in Africa. According to a report by the Organisation for Economic Co-operation and Development (OECD), Ghana’s tax-to-GDP ratio in 2021 (14.1%)– its greatest ever– was lower than the average of the 33 African nations in 2023 (15.6%).