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New taxes on petroleum exceeds IMF estimates for developing countries – ACEP

acepThe Africa Centre for Energy Policy (ACEP) says new taxes by government on petrol and diesel in particular are beyond acceptable levels for developing countries.

According to the energy think tank, an IMF survery on ex-pump prices for petroleum products for developing countries range between 22 and 30 percent. But the recent taxes on petroluem products, according to ACEP, are more than 40 percent in levies.

Government has said the January 1 adjustment in the prices of petroleum products were between 18 and 28 percent.

However, ACEP says government deceived Ghanaians, insisting Ghanaians are being punished with a 33 percent increase in petrol prices and 40 percent for diesel.

Executive Director of ACEP, Amin Adam, explains the Bretton-Woods institution conducted a survey in developing countries to ascertain the range of tax shares in ex-pump prices of the commodity.

He explains that the IMF survey findings show a range between 22 and 30 percent.

Amin Adam said in Ghana the tax component on petrol was 28% before the recent levies, however, it is now 41%. For diesel it was 18.7% before the new levies but this has now risen to 41.7%

“We are now way way way outside the developing circles…Ghanaians are being asked to pay much more….we least expected that Ghana will go outside the developing bracket” he expressed disappointment.

Africa Centre for Energy Policy has also accused government of double taxation.

The Executive Director Mohammed Amin Adam said government has introduced the Special Petroleum Tax – a tax it says constitutes double taxation.

The price of petroleum products is arrived at after government embeds several taxes. Yet after the price has been determined, government now imposes another 17.5% tax known as the Special Petroleum Tax, he noted.

“Tax on tax because the Special Petroleum Tax is a tax on ex-pump price which already contains all these levies and taxes,” he said this amounts to double taxation.

He indicated at a news conference Thursday, government is therefore unethically raising 674million Ghana cedis.

He said with the introduction of these new levies, Ghana has one of the world’s highest tax components on petroleum products.

ACEP noted that high taxation regime affects Ghana’s ability to attract businesses and makes Ghana’s economy an unattractive business destination.

The energy think-tank wants government to consider the hardships it is putting Ghanaians through and ease the burden.

“There are positive aspects of this Act [containing the taxes], we also think there are negative aspects which government has the opportunity to look at again”.

Source: http://www.myjoyonline.com/business/2016/January-7th/govt-breached-imf-boundary-on-fuel-price-increase-acep.php#sthash.Sppua0VQ.dpuf

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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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