Comprehensive  Ghana Oil and Gas news, information, updates, analysis


News in Brief

Government to raise GH¢1.4bn from petroleum tax

Oil and gas spillage

The government is seeking to raise about GH¢1.4 billion from the 17.5 per cent tax on petroleum products imposed in the latter part of last year, a Senior Tax Policy Advisor at the Ministry of Finance has disclosed.

Dr Edward Larbi-Siaw told the GRAPHIC BUSINESS in Accra that the  funds were expected to help cushion the government’s revenues from taxes, which experienced a shortfall last year.

The tax was announced in the 2015 Budget and Economic Policy Statement read in November last year and was greeted with public uproar due to its anticipated impact on fuel prices and cost of goods and services in general.

The impact was, however, mildly felt as it only resulted in a marginal three per cent increase in fuel prices at the pumps, an amount the transport companies declined to pass on to consumers.

Dr Siaw explained that the tax would not have an impact on final consumers of petroleum products, given that it would affect only the oil marketing companies (OMCs).

The OMCs source for their products, including petrol, diesel, premix fuel and liquified petroleum gas (LPG), from the bulk oil distribution companies (BDCs).

The tax policy advisor said since Ghana had become a middle income country, grants and aids from foreign partners would be cut, hence the need for the government to find alternative ways of raising revenue.

“We are not going to get concessional loans, so it must be through our efforts. Since external assistance is being reduced, we must try to mobilise the resources ourselves. We do not want to increase the debt-to-GDP ratio and we can only achieve that if mobilise the resources ourselves,” he said.

Tax measures

Government proposed certain tax measures for implementation this year. They include the imposition of the Special Petroleum Tax of 17.5 per cent as part of a rationalisation of VAT regime and change in the petroleum pricing structure.

This policy comes with a mitigation account to manage extremely low and high prices that result in sporadic price increases or decreases under the automatic adjustment formula, which comprises the reversal of excise tax on petroleum from Ad Valorem to specific extension of the National Fiscal Stabilisation Levy of five per cent and special import levy of one to two per cent to 2017 and increase the withholding tax on directors’ remuneration from 10 per cent to 20 per cent.

Other tax measures Dr Larbi-Siaw mentioned are the administrative improvement project being done by the Domestic Tax Revenue Division and the new computerisation by the Ghana Revenue Authority (GRA) known as Total Revenue Integrated Processing System (TRIPS).

“What will happen is that when people import, customs will share information with domestic tax so they will relate, if after your importation you are paying an internal tax, which is whatever business you do. Follow up is necessary though,” he said.

He added that if all these things are done, government revenue would be enhanced.

Outlook for 2015

The budget states that attention will be given to enforcing the tax laws in a transparent way. It said taxpayers would be treated fairly, consistently and transparently while increased quality of service will be used to encourage compliance.

Again, the GRA will ensure it has effective segmented compliance management strategies to facilitate taxpayer adherence to their tax obligations. The GRA will monitor sector-wise tax compliance behaviour to identify economic sectors manifesting high degrees of non-compliance and undertake requisite measures.

Citizens’ role to increase tax

The Senior Tax Policy Advisor reminded Ghanaians that the reward system instituted in the 2014 budget statement to reward citizens who report those who do not pay taxes is still in place, so Ghanaians should be courageous to report such tax defaulters.

He said it was unfortunate that Ghanaians did not have that culture, whereas elsewhere it is the norm. He gave an assurance that the identities of such informants/whistle blowers would be kept secret.

“It is unfortunate that the response has not been encouraging since we instituted that reward system. Perhaps it is due to the normal Ghanaian ‘mempe meho asem’ lest you would be seen as a bad person. So we are reminding Ghanaians that it’s a culture we have not grown so we must do that,” he said.

Source: Daily Graphic

Profile photo of Editor
Follow Us

Editor

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
Profile photo of Editor
Follow Us

Share this article

Leave a reply

Personality of the Month
  • Prof. Thomas Mba Akabzaa Chief Director of Ministry of Petroleum          …
Follow Us Online
Join the Discussions

Summary: Revenue mobilization from the oil sector for Agricultural production in Ghana, a myth or reality?

Agriculture, once considered the backbone of Ghana’s economy recorded a reduction of its contribution to GDP from 45% in 1992…

Responses Add your response


About Us
Reporting Oil and Gas project was launched on 4th June 2009 at Takoradi, Western Region, Ghana by Penplusbytes (www.penplusbytes.org) with the vision of providing a one stop online information and knowledge about Ghana’s oil and gas sector read more
Events Calendar
<< Aug 2017 >>
MTWTFSS
31 1 2 3 4 5 6
7 8 9 10 11 12 13
14 15 16 17 18 19 20
21 22 23 24 25 26 27
28 29 30 31 1 2 3
Twitter Activity Stream
 

Partners We are proud to be associated with:

Skip to toolbar