Parliament approves vehicle loan for MPs, Council of State - Okays $13.1 million tax waiver

Parliament has approved the $28 million medium-term loan agreement involving the government, members of the Eighth Parliament and the National Investment Bank (NIB) Limited to finance the purchase of vehicles for MPs from 2021 to 2024.

The House also approved the $3.5 million medium-term agreement between the government on one hand, the Council of State and the NIB on the other to finance the purchase of vehicles for members of the Council of State.

Additionally, the House okayed the request for the waiver of $13.1 million tax and duties for the purchase of vehicles for the official use of MPs and the Council of State members from 2021 to 2024.

The waiver will cover import duties, import national health insurance levy (NHIL), import GETFund levy, import value-added tax (VAT), EXIM levy, COVID-19 levy, African Union (AU) levy, inspection fees and withholding tax (IRS tax deposit) on the vehicles.

Endorsement

The approval came after the Chairman of the Finance Committee, Mr Kwaku Kwarteng, had moved a motion for the House to adopt the committee’s report and recommendations, which was unanimously supported by all members of the House.

The motion was seconded by the Ranking Member, Dr Cassiel Ato Forson.

The chairman said the loans were necessary to provide the framework for the disbursement of funds by the NIB to finance the purchase of vehicles for MPs and members of the Council of State.

He said the need for a safe and reliable means of transport for MPs, in particular, in the performance of their functions between Parliament House and their respective constituencies, could not be overemphasised.

According to him, the agreement in relations to the MPs required an undertaking by the Parliamentary Service of Ghana to make deductions from the remuneration of the beneficiaries at source and to issue a single cheque to cover the monthly repayments of the loan.

In the case of the members of the Council of State, he said the Ministry of Finance was required to secure an undertaking from each beneficiary to ensure that allowances were channelled through their accounts with the NIB and to mandate the NIB to effect deductions for the purpose of the loan repayment.

Numbers

Mr Kwarteng told the House that the committee agreed with the Ministry of Finance that the number of vehicles to be purchased by each beneficiary member be capped at two for the purposes of the tax waiver which shall not exceed the cedi equivalent of $43,750 for any member.

“Thus, any member who purchases more than two vehicles will be required to foot the tax bill on the extra vehicles even if the total tax exemption on the first two has not exceeded the tax exemption cap,” it said.

Discontinuation

He pointed out that the committee took note of recent concerns expressed by members of the public about the burden the current vehicle loan arrangement for MPs and members of the Council of State imposed on the public purse.

“These legitimate concerns are fuelled by the fact that of all the Article 71 officeholders, it is only MPs and Council of State members who benefit from these vehicle loans, part of which are repaid by the state,” he said.

“Members of Parliament and the members of the Council of State should have similar duty post vehicle arrangements as other Article 71 officeholders have. And the committee respectfully recommends that Parliament and the Parliamentary Service take the necessary steps to ensure that this happens.

“The instant vehicle loan arrangement for MPs and Council of State members before us today should, therefore, be the last one the state is sponsoring,” he added.