Gov’t to introduce new VAT incentives for local vehicle assembly

President John Dramani Mahama has announced plans to introduce new VAT incentives for vehicle assembly companies, with firms required to meet specified local production thresholds before they can benefit from tax exemptions.

According to the President, the Ministries of Finance and Trade and Industry are finalising the revised incentive framework, which is aimed at encouraging genuine local manufacturing and adding more value to vehicles assembled in Ghana.

Speaking at the commissioning of Phase Three of the Zonda Tec Ghana Limited Vehicle Assembly Plant, President Mahama said the new system would tie tax exemptions to the level of local production achieved by manufacturers.

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

He explained that the move was also intended to prevent companies from importing fully built vehicles and making only minor adjustments locally before presenting them as locally assembled products.

“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.

President Mahama said the Finance Minister would provide details of the new incentive package in the upcoming national budget.

He stressed that vehicle assembly should not be the end goal, saying the broader objective is to build an integrated automotive industry with strong participation from local suppliers.

The revised incentives, he said, are expected to promote deeper localisation, facilitate technology transfer, and create opportunities for Ghanaian small and medium-sized enterprises to participate in the automotive value chain.

The President further reaffirmed the government’s commitment to creating quality jobs, reducing Ghana’s reliance on imported vehicles, conserving foreign exchange and developing competitive automotive products for the ECOWAS and wider African markets.

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