Parliament has approved the US$28 million medium-term loan agreement involving the government, members of the eighth parliament and National Investment Bank (NIB) Ltd 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 the one hand, and the Council of State and NIB, on the other, to finance purchase of vehicles for members of the Council of State.
The House also approved a request for a waiver of $13.1 million in taxes and duties to cover the purchase of vehicles for official use by MPs and Council of State members between 2021 and 2024.
The waiver will cover import duties as well as National Health Insurance Levy (NHIL), GETFund Levy, value added tax (VAT), EXIM Levy, COVID-19 Levy and African Union Levy relating to imports, together with inspection fees and withholding tax (Ghana Revenue Authority tax deposit) on the vehicles.
Endorsement
Approval for the loan came after the chairman of the finance committee, Kwaku Kwarteng, had moved a motion for the House to adopt the committee’s report and recommendations.
The motion was unanimously supported by the House.
The motion was seconded by the ranking member of the committee, Cassiel Ato Forson.
The chairman said the loans have become necessary to provide a framework for disbursement of funds by 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, as well as in the performance of their functions between Parliament House and their respective constituencies, could not be overemphasised.
Kwarteng said the agreement relating to the MPs required an undertaking by the Parliamentary Service of Ghana to make deductions from the remuneration of all beneficiaries at source and to issue a single cheque to cover monthly repayments towards the loan.
In the case of 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 are channelled through individuals’ accounts with NIB and to mandate NIB to effect deductions for the purpose of repaying the loan.
Numbers
Kwarteng told the House that the finance 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.
In addition, the value of the waiver cannot 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,” Kwarteng said.
Discontinuation
He pointed out that the committee had taken note of concerns expressed by members of the public regarding the burden the current vehicle loan arrangement for MPs and members of Council of State places on the public purse.
“These legitimate concerns are fuelled by the fact that of all the Article 71 office-holders, 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 office-holders 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,” Kwarteng said.
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