Ghana Customs Valuation for Used Vehicles

The United States is Ghana’s top supplier of used vehicles.  Ghana assesses a compounding charge of: 1) the tariff (varies from 5 – 20%, depending on the vehicle’s engine displacement); 2) 11% in other duties and charges; and 3) a 15% Value Added Tax (VAT) on both new and used vehicles.  For used vehicles, in particular, the basis for assessing those duties and charges is not the transaction value agreed between buyer and seller. Instead, Ghana requires importers to use a vehicle identification number (VIN)-based reference price system as part of its customs valuation to construct a “cost” for the vehicle being imported.  This system is complex, subject to change, and tends to greatly overvalue used vehicles, which in turn, magnifies the cost effect of the tariffs, VAT, and other charges.  

Specifically, as part of Ghana’s Integrated Customs Management System (ICUMS), importers must use an online reference price calculator to determine an initial home delivery value of the used vehicle they are importing.  Importers insert the VIN, Country of Origin, and age of the car into the ICUMS system and it generates a Home Delivery Value (HDV) in dollars. It tends to assign a relatively high value to used vehicles, higher than the typical Kelley Blue Book value for a particular used vehicle.  The ICUMs system also applies an estimated insurance and freight cost to arrive at a cost, insurance, and freight (CIF) value.  Then it multiplies the CIF value by the sum of the tariffs, duties and charges and VAT, expressed as a percentage (say 40% if the tariff alone is 10%). The resulting number comprises what the ICUMS system calls a total charge. 

In prior years, the Ghana Revenue Authority then applied a discount to the total charge estimated by the ICUMs system.  It was zero for vehicles that are 0-6 months old, 15% for vehicles 6 months to 1.5 years, 30% for vehicles 1.5 – 2.5 years, and 40% for vehicles 2.5 to 5 years old.  There was no discount provided for vehicles older than five years old.  However, in the 2023 Ghanaian budget that was released in November 2022, the Ghanaian Government announced that it eliminated the discount entirely.  

As a third step in the process, the Ghana Revenue Authority adds a penalty back onto the HDV according to the vehicle’s age.  These penalties are reportedly still in effect and are as follows: 
a.    Less than 10 years, no penalty
b.    Between 10 years and 12 – 12.5% CIF penalty
c.    12 years to 15 years – 20% CIF penalty.  
 
For more information about exporting vehicles to Ghana or to discuss concerns about the customs valuation system, contact Commercial Service Ghana at Office.Accra@trade.gov or +233(0)30-274-1870.  Please see our Country Commercial Guide to Ghana for broader context on doing business in Ghana and our market intelligence reports for ongoing updates on specific topics and industries.