Parliament cuts 2% tax off petroleum products

Dr Anthony Akoto Osei

Dr Anthony Akoto Osei

PARLIAMENT has amended the Special Petroleum Tax Act, 2014 (Act 879), now Special Petroleum Tax (Amendment) Act 2018, slashing the tax component on petroleum products from 15 per cent to 13 per cent effective today.

 

The amendment comes in the wake of pressure on the government to abolish the tax in line with its electioneering campaign promise following the surge in the price of petroleum products occasioned by hikes in the price of the commodity on the world market.

 

Introduced in 2014, to make up for the windfall in the price of petroleum products on the global stage, the tax featured heavily in the run-up to the 2016 general elections with the then opposition New Patriotic Party pledging to “scrap” the tax it called “nuisance” to bring relief to Ghanaians.

 

Upon assumption of office, the government reduced it from 17.5 per cent to 15 per cent in the 2017 budget and has now followed it up to 13 per cent.

 

Done under a certificate of urgency, having considered that the rising cost of petroleum products affects businesses negatively, the reduction will amount to GH¢47.90 million loss to the state annually.

 

Moving the motion for the amendment on behalf of the Finance Minister, the Monitoring and Evaluation Minister, Dr Anthony Akoto Osei, MP, Old Tafo, said if the bill is not amended and assented to before the next pricing window which starts today, February 16, 2018, “the full impact of the reduction will only be felt at the beginning of the next pricing window which starts at the beginning of March.”

 

According to him, the bill is in tandem with government’s aim of shifting the focus of tax policy from the introduction of new taxes to improving tax compliance as a basis for revenue generation.

 

Seconding the motion, Chairman of the Finance Committee, Dr Mark Assibey-Yeboah, New Juaben South MP, said the Finance Ministry had explained to them (Committee) that the sudden introduction of the bill was due to the recent changes in the international prices of crude oil which was not anticipated in the formulation of the 2018 budget.

 

He said per calculations given them by officials of the National Petroleum Authority, ex-pump price of petrol will go down by 3.39 per cent with diesel expected to drop by 4.14 per cent.

 

These will translate into GH¢4.51 and GH¢4.48 (from GH¢4.67) per litre for petrol and diesel respectively, he noted.

 

This, he said, will bring some relief to Ghanaians in the face of the increment in the price of the commodity.

 

But the Minority said the reduction is insignificant and would have no impact on the final consumer and wants government to live by its word and scrap the tax as it preached when in opposition.

 

Minority Chief Whip, Alhaji Mohammed Mubarak Muntaka described the percentage reduction as a “sad day for Ghana” because the government had reneged on a major campaign issue.

 

The Asawase MP said the only way the politicians could win the trust of the Ghanaian electorate is when it lives by its promise and asked the government to keep the promise.

 

A Deputy Minister of Finance, Kwaku Kwarteng, however, said the call for the abolishment of the tax by the Minority was insincere when they championed its passage in the first place.

 

He said in totality, government has reduced the tax by 4.5 per cent since taking the reins of power and for their colleagues opposite to conclude that it was insignificant was a ingenuity.

BY JULIUS YAO PETETSI

 

 

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