Energy Consultant Dr. Sulemana Yussif, has stated that the implementation of the new taxes on the energy sector risks stifling the growth of the economy.
The taxes were introduced in the 2021 budget statement and will take effect on May 1, 2021.
Dr Yussif argues that the new taxes have the tendency to reduce expenditure in the sector which will have a negative impact on the economy especially as it recovers from the impact of the COVID-19 pandemic.
In an interview with Citi Business News, Dr Yussif stressed that although the taxes might be necessary, the government ought to work to attain a balance that will protect the sector and the economy.
“What they can do immediately is once they start seeing the money coming in from the taxes, they shouldn’t send it to places where the accountability will not be seen. They should just channel it to productive ventures where it can create employment opportunities. If it can be done that way the fears of taxes stifling growth will be neutralized by channelling it to productive ventures, opportunities or portfolios.”
“Industries need to grow, and before an industry can grow it will need people to consume products and if taxes are so much, people will not consume products. That is why the USA in all this Covid-19, most of their stimuli, about 1.9 trillion dollars, went straight to consumers,” he added.
Following the government’s proposal and the subsequent approval of these new taxes, the Ghana Revenue Authority set 1st May 2021 to commence implementation.
The taxes are 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)
Under one of the taxes, that is, the Energy Sector Recovery Levy 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.
