[ 2021-03-16 ]

There’s no justification for newly proposed petroleum taxes – Wereko-Brobby
A former Chief Executive Officer of Ghana’s
Volta River Authority, Dr. Charles Wereko-Brobby
says there is no justification for the
government’s proposal of new taxes on petroleum
products.

He said the sector has become an easy avenue for
the government to rake in money through new levies
and taxes hence the many tax components for fuel
purchased.

Speaking on Eyewitness News, the businessman said
since the administration of President John Agyekum
Kufuor, several taxes have been slapped on the
petroleum sector, leading to the high cost of fuel
with consumers continually bearing the cost.

“It is totally unjustified… There is no
justification, it [petroleum products] just
happens to be a low-hanging fruit that you can
just slap anything on,” he said.

He suggested that some special taxes introduced
for specific purposes should be scrapped to offer
petroleum customers some relief rather than the
introduction of new taxes.

“20 years ago, President Kufuor introduced what
he called the Refinery Recovery levy. That was
supposed to last for four years but 20 years on,
it is still here, now as the energy sector
recovery levy. In 2015, oil prices collapsed and
Mahama government instead of reducing prices
according to the formula said our revenues are
down because the datum prices of oil have gone
down, so we need to crawl back revenue, so there
was a 2-year special petroleum levy. I think 8
years on, it is still on. I will suggest that if
these two temporary taxes which were meant to
address specific issues were removed, that alone
will reduce taxes,” he said.

Osei Kyei-Mensah-Bonsu, the Minister for
Parliamentary Affairs and caretaker Minister for
Finance while delivering the 2021 budget statement
in Parliament announced the tax proposals on fuel;
10 pesewas per litre for diesel and petrol as
Sanitation and Pollution Levy (SPL) and 20 pesewas
per litre of petrol and diesel to be used as
Energy Sector Recovery Levy to cover charges on
the State for excess capacity of power.

“To provide the requisite resources to address
these challenges and fund these activities,
Government is proposing a Sanitation and Pollution
Levy (SPL) of 10 pesewas on the price per litre of
petrol/diesel under the Energy Sector Levies Act
(ESLA),” the Minister said.

“Mr. Speaker, it has become very necessary for
Government to consider a review of the energy
sector levies. The Energy Sector Recovery Levy of
20 pesewas per litre on petrol/diesel under the
ESLA is hereby submitted to this House for
approval,” he added.

The development has generated huge controversy
with many Ghanaians complaining that should the
proposed taxes be approved, it will bring untold
hardship on them especially as they are yet to
recover from the effects of the COVID-19 on their
personal economies.

In fact, fuel prices have already risen by some
11% in the last two months and the proposed new
taxes could make an additional 5% rise in taxes
which will be borne by consumers.

Dr. Wereko-Brobby said, “the idea that
sanitation taxes should be put on petroleum
doesn’t make sense. I think government has been
dishonest with the people of Ghana and not just
see petroleum as the big cow for ripping off
people.”

He expressed concern that any further increase in
the price of petroleum products could lead to
other aspects of the economy being affected
negatively.

He therefore advised the government against the
proposed new taxes.

Source - Citinewsroom

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