An energy consultant, Dr Yussif Sulemana has said he expects government to review a number of taxes in the petroleum sector in its 2021 mid-year budget review.
The presentation by the Finance Minister, Ken Ofori-Atta is in accordance with Article 179 of the 1992 Constitution and the Public Financial Management Act 921, which offers the opportunity to revise macroeconomic targets and provide a comprehensive economic outlook for the rest of the year.
Ahead of the presentation to Parliament today, July 29, 2021, Dr Sulemana believes that as oil prices on the global markets continue to remain volatile, government ought to review or scrap some petroleum taxes in order to make up for its revenue shortfalls.
“We projected maybe around 54 dollars a barrel because there are always projections in the budget. Now we have oil prices around 74 dollars a barrel. That means that potentially we could have extra revenue provided the oil price stays as it is. In the budget review, I expect the government to juxtapose our gains within the upstream and try to see whether there is a way they can cushion consumers at the downstream,” Sulemana stressed.
He continued, “Economies are still recovering and Ghana is not an exception, so what we should look at is to continue to find means and ways to stimulate economic growth and stimulating economic growth means you have to reactivate consumer spending. Consumer spending will be reactivated when goods and services are reachable, available and affordable. Going forward, I think we should revisit the taxes.”
As part of efforts to mobilize enough revenue, Government in its 2021 budget and economic policy statement announced a wave of levies and taxes.
These included; the COVID-19 Health Recovery Levy Act, 2021 (Act 1068), Financial Sector Recovery Levy Act, 2021 (Act 1067) and the Energy Sector Levy (Amendment) Act, 2021 (Act 1064).
Taxes under the Energy Sector Recovery Levy however were made up of GH¢20 pesewas per litre of petrol or diesel, and 18 pesewas per kg on Liquefied Petroleum Gas (LPG), while a Sanitation and Pollution Levy of GH¢10 pesewas per litre of petrol and diesel respectively were introduced.
The move has since culminated in an increment of petroleum products which has affected the consuming public and transportation fares.
Meanwhile, oil prices on the global market began this year selling at about US$40 but has now increased to US$74 dollars per barrel.