Foreign vessels operating in the West African coastal area have threatened to pull out of Ghana due to what they describe as “heavy taxes” imposed on their operations by the National Petroleum Authority (NPA).
A letter from the NPA, dated January 12, 2018, and sighted by Myjoyonline.com read that “…effective January 16, 2018, all the taxes, levies and margins applicable to domestic Gasoil (except UPPF Margin) will apply to Marine Gasoil (MGO) Foreign.”
The Finance Minister, Ken Ofori Atta during his presentation of the 2018 budget to Parliament told MPs the decision, which has become necessary, is aimed at curbing the dumping of marine gas oil on the domestic market.
“Mr. Speaker, the lack of taxes and levies on Marine Gas Oil (MGO) Foreign creates a price gap between the product and regular gas oil and provides an incentive to dump the product on the domestic market as regular gas oil in order to evade the tax.
“The volume of MGO-Foreign increased significantly from 2.4 million litres in the last quarter of 2016 to 18.3 million litres in the second quarter of 2017, representing a 653 percent increase in demand. With effect from 2018, taxes and levies on MGO Foreign will be restored to curb the dumping of illegally acquired gas oil on the domestic market,” Mr. Ofori Atta announced.
The Ministry in a memo to the NPA on January 11, 2018, and signed by Chief Director, Patrick Nomo, directed the Authority to “put the right measures in place to begin the implementation of this policy.”
But This directive seems to have angered foreign vessels trading on the shores of West Africa as they claim it is against industry practice.
An industry player in an interview with Myjoyonline.com cautioned the government against the move as it has the potential to slow down business in Ghana.
The source said “This directive is alien to us. The whole of West Africa, none of the countries is demanding for this charge, and we can only advise ourselves to do business in either Togo or Nigeria. This imposition means Ghanaian importers will suffer and that will be negative to the economy of Ghana.”
It will be recalled a similar directive in Nigeria in the airline industry forced a lot of international carriers offering flight services to relocate their offices to Accra, Ghana from their operational bases in Nigeria.
The airlines cited the high cost and lack of aviation fuel as some of the reasons for their relocation.
Industry players believe this move by the NPA can spark similar agitations in the Ghanaian fishing industry.
They express shock at the step as such taxes will slow down the activities at the port and cause the state financial loss.
Meanwhile, the Chief Executive Officer for the NPA, Hassan Tampuli has defended the decision to impose the taxes explaining that, some of the vessels divert the product and sell them inland which is contrary to the laws of the country.
The chemical composition of marine gas oil he explained, is not different from that which is traded inland and taxed by the state. However, what is used by vessels is tax exempt because the vessels shuffle between countries along the coastal belt.
Therefore, the illegal sale of the untaxed product inland started having negative implications for local companies including Ghana Oil Company Limited (GOIL) which at a point threatened to lay off workers.
“Sometimes they tell us they are going to bunker this vessel but when we ask them to state the volume that the vessel requires, the quantity they bring is way beyond the volume of the vessel,” Mr. Tampuli told Myjoyonline.com.
Based on this, the Authority proposed to the Finance Ministry to impose taxes on marine gas oil in order to curb the diversion and illegal sale inland which the Ministry approved.
Mr. Tampuli called the bluff of the vessels threatening to move their operations from Ghana because “we don’t lose anything.”
“The government too will be happy if the vessels won’t come to Ghana and we are going to have our revenues,” he told Myjoyonline.com
The specific taxes and levies are listed below:
*SPT will be cumulated in the PBUs published by the NPA for every sales window.