Only residential users should pay energy levies – Oteng Gyasi

Business News of Sunday, 21 August 2016



Tony  Oteng Gyasi NewTony Oteng Gyasi, Former AGI President

A former President of the Association of Ghana Industries [AGI], Tony Oteng Gyasi, is impressing on government to limit the imposition of the energy sector levies to residential users of petroleum products only.

According to him, the imposition of the taxes on all categories of petroleum users (both industrial and domestic), is to the disadvantage of industry. Mr. Gyasi explains that the development increases the cost of operation which makes it difficult for businesses to expand and employ more people.

“It seems to be that we should look at the situation where the energy levies are put on only the residential users. Over the last five years or so, industries have paid more than residential users so if there have been a subsidy, they have been granted to residential users,” “Rather than burdening industry further, the levies should be on residential users and I think that may be a more realizable way of looking at things,” the former AGI boss stated.

As part of generating revenue to offset some accumulated debts within the country’s energy sector and make the energy companies viable, government in December 2015, introduced the Energy Sector levies to place taxes on some petroleum products.

The Energy Sector Levies saw the introduction of the energy debt recovery levy and the price stabilisation and recovery levy. In addition, the road fund and the energy fund were revised upwards. Meanwhile the TOR debt recovery levy, the cross-subsidy levy and the exploration levy were withdrawn.

The decision also became necessary following concerns by some industry players that Ghanaians were not paying economic prices for petroleum products. As a result, businesses including the Bulk Oil Storage and Transportation Company (BOST) and Oil Marketing Companies (OMCs), lamented their inability to facilitate their operations as government defaulted in offsetting huge debts accrued in the form of subsidies to some categories of users of petroleum products.

Meanwhile the former AGI President has suggested to government to work to reduce the capacity charges for power in the country.

In his view, the ability to do this will give Ghana a competitive advantage to export excess power that it generates to neighbouring countries and equally rake in some revenue.

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