Africa-Press – Ghana. A tax analyst has suggested to the Government to consider consolidating all fuel related taxes and levies and cap it at GHc 1.50, at the pumps.
The government currently collects a total of GHc 3.00 on every litre of fuel purchased at the pumps, through the imposition of GHc 0.49 pesewas per litre as energy debt recovery levy, GHc 0.16 pesewas per litre on petrol and GHc 0.4 pesewas per litre on diesel, as price stabilization and recovery levy, GHc 0.01 pesewas per litre as energy fund and GHc 0.48 pesewas per litre, as road fund levy.
However, Mr Benaiah Nii Addo, Executive Director of the Green Tax Youth Africa (GTYA), a tax advocacy organization, said consolidating all the taxes and capping it at Gh¢1.50 at the pumps, would help bring some form of financial relief to citizens, as part of the resetting agenda of the government.
Speaking to the Ghana News Agency in an interview in Kumasi, on promoting broader economic tax policy reforms in Ghana, through intense consultations and stakeholder engagements, Mr Addo said fuel prices in the country was too high.
He pointed out that maintaining the Public Lighting and the National Electricity Scheme Levies at three and four per cent respectively, and the proposed imposition of Gh¢1 levy on fuel, would sum up fuel levies and taxes to about 40 per cent of ex-pump fuel prices.
“Rising fuel prices, caused by excessive taxes and levies, have escalating effects on transport, commodities and service delivery.
This had contributed to the ranking of Ghana as the 12th most expensive country in Africa,” Mr Addo stated.
He said the most affected citizens were the poor and people in low-income bracket who struggled to afford the high cost of living due to the current severe economic situations.
He pointed out that Ghana extracted oil and sold at the world market, however, citizens do not benefit from the oil wealth but were burdened with excessive levies and taxes.
To ensure that citizens benefited from Ghana’s oil wealth, Mr Addo said the government must take pragmatic steps to reduce fuel prices to a single digit, while exploring other areas of revenue mobilisation.
Mr Addo indicated that capping fuel-related levies and taxes at Gh¢1.50 would contribute to making domestic fuel prices relatively stable and affordable.
This would go a long way to prevent drastic increments that could disproportionately affect low-income households in the country.
Also, he employed the government to initiate an automatic price adjustment mechanism to enhance retail price controls to minimise huge profit margins on transportation.
Mr Addo again urged the government to explore the area of recovering state funds from politically exposed persons whose sources of wealth were questionable.
“Ghana loses billions of monies annually through corporate tax evasion, transfer pricing manipulation and other illicit outflows,” he noted.
Additionally, Mr Addo urged the government to strengthen the regulatory and tax administration systems to either eradicate or minimise corruption and retain funds in the country.
He noted that the funds recovered could be redirected to public development priorities to ease the financial burden on citizens while improving the cost.
He appealed to the government and the Public Utilities Regulatory Commission to revise the quarterly electricity increment mechanism since it deepened the inequality gap.
Also, he called for an increase in transparency in beneficial ownership and the implementation of strict penalties for multinational tax abuse.
Mr Addo urged the government to prioritise consultations and stakeholder engagement in making decisions on Ghana’s economic policies to ensure that the right policies were made.
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