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Evaluate petroleum tax to determine its effect- incoming govt told

flowoilflowAs the incoming government prepares to take over the administration of the country, some observers in the tax industry have called for an evaluation of the Petroleum Tax and other tax components in the Road Fund levy to positively impact businesses.

Some Ghanaians expressed dissatisfaction at the beginning of this year when the price of fuel was about 70 percent constituted by taxes.

Speaking to Citi Business News, Tax Consultant Ali Nakyea-Abdallah reiterated calls for such laws to be evaluated to determine it real impact on businesses.

According to him, the subject is still relevant since businesses have complained about the adverse impact of some components of the taxes.

“Industry has always complained about the cost of doing business. What translate into cost is the indirect taxes on the input that they use in their productive process. One of which is the petroleum product so if you have a lot of inbuilt taxes by way of recovery levies, road fund levies and all that, and then you introduce another special petroleum levy. If you think that taking off some of them will not affect your revenue base and can ease pressure on these businesses, then evaluate it,” he advised.

He pointed out that a comprehensive evaluation will show whether a review of such taxes will impact positively on business operations which could be recouped by corporate tax.

“If you think that when cost goes down these businesses will make more profit and you can get revenue through corporate tax then you can evaluate and also review,” he stressed adding that tax evaluation is the best form of determining the effectiveness of tax laws.

Cautioning against calls to scrap taxes without evaluation, Mr. Nakyea-Abdallah stated that taxes are intended for a purpose, hence must always be evaluated before they are removed.

“Taxation is such that you cannot just cancel without finding an alternative is about evaluating its impact on business and then you can tell whether it has to be reviewed or not.  You don’t just review. There are reasons why taxes are levied,” he said.

Proposed tax reforms by NPP

Speaking in March this year, the President Elect, Nana Akufo-Addo promised to reduce the corporate tax rate, abolish VAT on Financial Services, and remove duties on the importation of raw materials and manufacturing equipment, amongst other fiscal incentives to stimulate growth of the private sector.

Source:   http://citibusinessnews.com/index.php/2016/12/13/evaluate-petroleum-tax-to-determine-its-effect-incoming-govt-told-2/

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Reporting Oil and Gas project was launched on 4th June 2009atTakoradi, Western Region, Ghana by Penplusbytes (PPB – www.penplusbytes.org) with the vision of providing a one stop online information and knowledge about Ghana’s oil and gas sector
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