Ahead of the presentation of the 2021 mid-year budget review today, Thursday, July 29, 2021, Energy Consultant, Dr. Yussif Sulemana, says he expects the government to review some taxes introduced in the petroleum sector.
He argues that as oil prices on the global market continue to surge, the government stands to make up for any revenue shortfall that could occur if it goes ahead to scrap some of these taxes.
“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.”
He added that the removal of the taxes could help in reviving the economy amidst the impact of the COVID-19 pandemic.
“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.”
Oil prices started the year at about 40 dollars a barrel, but currently, a barrel goes for 74 dollars.
The government as part of its revenue mobilization drive introduced some levies and taxes in the 2021 budget, a move many criticized.
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).
There 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 was also introduced.