Vehicle assemblers must meet local-content threshold to qualify for VAT exemption
The government is set to introduce a minimum local assembly requirement for vehicle manufacturers seeking to benefit from VAT exemptions under Ghana’s automotive policy.
President John Dramani Mahama disclosed that the Ministry of Finance and the Ministry of Trade and Industry are finalising incentives for semi-knockdown vehicle assembly, including the percentage of local content manufacturers must achieve to qualify for the tax exemption.
He made this known on Tuesday, September 15, 2026, when he commissioned Phase Three of the Zonda Tech Ghana Limited vehicle assembly plant.
President Mahama said the new threshold would be captured in the next national budget.
He explained that manufacturers would have to carry out a significant portion of the vehicle assembly process in Ghana before they could access the VAT relief.
“The Ministry of Finance and the Ministry of Trade and Industry are finalising their discussions on the incentives for semi-knockdown automotive assembly. We are going to introduce a percentage which you must achieve to be able to qualify for the VAT exemption,” he said.
The President warned that companies would not be allowed to import vehicles that are virtually fully assembled and perform only minor tasks locally before describing them as Ghana-assembled vehicles.
“We don’t want manufacturers who bring the whole car. They just remove the steer and the tyres and they bring it here, put the tyres and put a steer and say we’ve assembled this vehicle in Ghana,” he said.
According to him, the new requirement will ensure that companies benefiting from Ghana’s automotive incentives make a substantial contribution to local manufacturing, employment and value addition.
President Mahama also announced plans for government to work with banks and local vehicle manufacturers to develop financing arrangements that would make it easier for salaried workers to purchase locally assembled vehicles.
He said many formal-sector workers, including doctors, teachers, nurses and private-sector executives, were interested in buying new vehicles but lacked access to suitable financing.
He said a long-term hire-purchase arrangement would allow workers to acquire vehicles and repay the cost gradually through deductions from their salaries.
“So government is ready to collaborate with the private sector. We’re ready to collaborate with the manufacturers. We’re ready to sit down with the banks and come out with financing instruments that allow people who are employed and engaged and receive an income to be able to take a car of their choice and pay monthly over a certain period until they have defrayed the cost of the vehicle,” he said.
The President said the expansion of the Zonda Tech assembly plant is expected to nearly double the company’s direct workforce and create about 1,000 additional indirect jobs in logistics, maintenance, component supply and distribution.
He said the financing initiative forms part of a broader government strategy to position Ghana as a major automotive manufacturing hub in West Africa.
President Mahama pointed to the Ghana Automotive Development Policy, which has attracted several international vehicle manufacturers, including Volkswagen, Toyota, Nissan, Hyundai, Honda, Kia, Great Wall Motors, Geely, Chery, Forland and Peugeot, as well as indigenous manufacturer Kantanka.
He also praised Zonda Tech founder Yang Yang for establishing the Zonda Tech Academy to equip young Ghanaians with automotive skills.
The President further commended the Zonda Tech Foundation for announcing scholarships to enable Ghanaians to pursue studies in automotive manufacturing in China.
By Esther Padmore Amonoo
