Ghana Automotive Tariffs

In September 2022, the Government of Ghana announced that it plans to move forward on a plan from 2020 to increase tariffs on vehicles less than five years old in Harmonized Tariff Schedule (HTS) categories 8703 and 8704.  
 
Ghana plans to increase tariffs on these vehicles from 10% to 35%. Vehicles that are five years to nine years old will retain a 10% tariff.  Vehicles that are 10 years old or older will be banned under this policy. These measures require additional action by Parliament.
 
The new 35% tariff is exacerbated by the application in Ghana of 11% in other various duties in charges, as well as 12.5% in Value Added Taxes. Because these costs cumulate, the overall tariff effect is more than 60%.  This is compounded, in turn, by an opaque customs valuation/benchmark system in Ghana that often overvalues used vehicles, in particular, creating a high basis on which these duties and taxes are assessed. 

The new Ghanaian policy, which is part of Ghana’s drive to jumpstart domestic automotive production and reduce imports of vehicles, is expected to enter into force at the end of 2022. However, with current overall inflation that reached 37% in September, demand for new, locally produced, vehicles is expected to be weak in the short to mid-term. Further, less than five percent of new car sales are financed by banks, according to the Ghana Automobile Dealers Association. Commercial bank interest rates in Ghana range from 25 to 30 percent, making loans unaffordable to many consumers.   

For more information about Ghana’s automotive sector, see Commercial Service Ghana’s Country Commercial Guide or contact the U.S. Commercial Service in Accra at office.accra@trade.gov or +233-30-274-1870.  For additional market intelligence on the Ghanaian market, click here.