How To Calculate Used Car Duties in Ghana: Cost Of Importing Cars To Ghana

Nowadays, used cars account for about 70% of cars imported to Ghana. This means Ghana is a good sales point if you deal in the sales of used vehicles. However, while you may be excited about having a large market in Ghana for your sales, it’s first of all important you know what it takes to clear your vehicle from customs. No one is exempted from payment of duties except the President, state institutions, and diplomatic missions.

Requirements For Getting Your Car Cleared By Customs

Importing your vehicle involves the process of purchasing, shipping and clearing the vehicle once it has arrived in the country. Just like in every country, clearing your used car or any commodity through the customs in Ghana requires that you comply with a set of requirements. These requirements will involve abiding by the rules of the kinds of vehicles allowed into the country as well as having the necessary documents. Below is a list of the requirements to get your car cleared by customs.

• Vehicles must be between 5 and 10 years old. Cars older than 10 years are subject to additional Taxes and Duties.
• The vehicle cannot have more than a ¼ tank of gas.
• You might be required to file for a FERI, ECTN, BSC, or an ASHI before your used car enters the country.
• Title and registration
• Original purchase invoice
• Insurance papers
• Passport
• The make, model, and serial number
• Packing list (this is required with the Container shipping method)
• Certificate of value and origin

HS CODE

Cars coming into Ghana are usually classified and assigned a code known as the Harmonized System Code (HS) Code. Whatever category a used car falls under determines the amount of import duty imposed on it. This system allows the custom duty to determine the import duty chargeable on a car as well as any other attached tax to it. It’s always wise for used car dealers to know the HS code assigned to the vehicle they are importing. This will help you prepare ahead for every relevant payment.

Cost Of Importing Second Hand Cars To Ghana

Ghana’s customs use a value known as CIF, which means Cost, Insurance, and Freight, to calculate taxes and duties that need to be paid for a car. You’ll need the CIF value of your car to have an idea of the total cost of shipping your car.

Home Delivery Price (HDP)

Ghana customs agents usually take into consideration the home delivery price of a vehicle before an exact import duty cost is given. The HDP is the manufacturer’s price of the car at the year of manufacture. In arriving at the CIF value of a used car, customs usually use the manufacturer’s price and apply the rate of depreciation depending on the age of the car.

For instance; A 2015 Honda Civic with a home delivery price of $30,000, handed at the origin of Port at $300, shipped to Ghana with an insurance package of $400 and freight of $1300.

Also Read:

• 2022 New Cars To Expect In Ghana: Reviews And Prices
• Latest 2021 Toyota Cars In Ghana – Price, and Review
• Affordable Mercedes Benz Cars In Ghana: Prices And Reviews In 2021
• Richest Men In Ghana 2021: Cars And Net Worth of Ghanaian Richest Men

This car is 6 years old as of 2021. Let’s say a depreciation value of 60% is attached to it – 60% of $30,000 = $18,000, Cost ( HDP+ Handling charges) = (18,000+300) = $18,300, This implies CIF= (18,000+400+1300), CIF value for duty purposes is $20,000

Other import charges on used cars:

• Import duty …………………………..………..5, 10 or 20% of CIF value of a car
• Import VAT……………………………………..12.5% of duty inclusive value (CIF + duty)
• NHIL (Health insurance levy)…………….5% of duty inclusive value
• Examination fee……….……………………….1% of CIF value
• ECOWAS development levy…….…………5% of CIF value
• Export development (EDIF) levy………..0.5% of CIF value

Used vehicle duty calculation in Ghana also depends on the HS code. Hence, a vehicle duty is calculated at 5%, 10%, or 20% of the CIF

CIF = value of cargo + FOB + Sea Freight/Transport

The costs of shipping a car to Ghana range between $1150 and $1600 for sedans and regular SUVs. Most shipping companies usually take vehicles to the port of Tema in Ghana.

Cars That Attract More Duties Cost By Customs

Ghana has a penalty levy on overage cars. Cars older than 10 years cost more to clear than cars within the acceptable age limit. Note that, for duty purposes, the age of the car is calculated from the date of its manufacture. The Ghana government made this ban to protect Volkswagen AG and Nissan Motor Co. as they set up local plants within the country.

• Overage Penalty levy on private cars includes;
• Age exceeding 10 years, but less than 12 years: 5% of CIF
• Age exceeding 12 years, but less than 15 years: 20%
• Age exceeding 15 years: 50% of CIF
• Other rates are applied to commercial vehicles.

Ghana Import Duty Exemptions

The following items are exempted from import duty in Ghana:

• Machinery/equipment for agricultural use
• Food and milk for feeding babies or infants
• Any products owned by specified privileged government officials, institutions, and organizations Items owned by individuals from diplomatic missions
• Advertising materials. For instance, trade samples requested by the importer that will be re-exported after use
• Baggage concessions and personal effects, aircraft parts and accessories
•  Fish caught by Ghanaian-owned boats, canoes, floats, and gear
• Educational, cultural and scientific related materials
• Foodstuffs, including raw foodstuffs and garri. It should be noted that meat and alcoholic beverages coming in from West Africa are not exempted.

Vehicle Duty Calculation

The first purchase price, which is the manufacturer’s price at the time the car was manufactured is needed for Vehicle Duty Calculation.

It will attract an extra 50% depreciation after which it will come down to Free on Board (FOB) then the current exchange rate is applied before the freight and insurance are considered.

Third-Party Charges

• Local shipping line charges are paid to the carrier
• Terminal handling charges
• Safe bond terminal handling charges (optional) rent for the car whilst it is in the terminal
• Trade number plate GH₵154
• Clearing Agent charges

Dispensation for Right-Hand Steering Vehicles

Per Customs laws, right-hand steering vehicles are not allowed into the country but there is a policy dispensation allowing for some consideration upon importer application, a right only the Minister of Trade reserves.

After all, processes have been followed through at the port, the Customs ensures Right-hand steering vehicles are dismantled, awaiting subsequent Left-hand refit before they can fully ply our roads.

Restricted Vehicles

These are vehicles which are only imported by specialised institutions be it government or private

• Armoured Vehicles – Ghana Armed Forces
• Ambulances – Hospitals or Government of Ghana
• Hearses – Funeral homes
• Fire tankers/trucks­ – Ghana National Fire Service

Please Note

1. It is vital for vehicle importers to make the needed enquiries with relevant parties before they carry on any importation of vehicle(s) to prevent difficulties in meeting all the clearing requirements at the ports of Ghana.
2. Once a consignee has the Title and Bill of Lading of the vehicle, they can pay a duty before it arrives at the port.
3. No one is exempted from payment of duties except the President, state institutions and diplomatic missions. In cases where a vehicle has to be sold by any of the aforementioned to an individual or private company, duties have to be paid before the change of ownership is made.

CONCLUSION

If it’s your first time importing a used car into Ghana, make sure you do extensive research such that you don’t get stranded when it gets to the point of paying Import charges. Also, note that in Ghana, once your consignment gets to the port, you need to have it cleared within 60 days otherwise you might forfeit it to the state.