Mr. Mahama also warned that the high price of fuel, particularly Liquefied Petroleum Gas, had long-term degrading effects on the environment because of the cheaper, but more destructive alternative of charcoal.

[contextly_sidebar id=”Lw42bZ6V4XmqGv71Excq4qdLKlcIBjWD”]Speaking at the latest in the series of National Democratic Congress unity walks in the Eastern Region, he reminded the New Patriotic Party of its promise to relieve Ghanaians of such burdens.

“We were told that it [petrol] was too expensive and that 50 percent of the petrol was made up of taxes alone and that when they win and come into office, they would remove the taxes so that petrol will [be cheaper]. Today petrol is selling at GHc 22 per gallon.”

“I am even more concerned about LPG because LPG was about GHc40 before December 7. Today LPG is more than GHc80. What it means is that for those who cannot afford LPG, they will go back to using charcoal and we all know the implications of using charcoal. When you use charcoal, it degrades the environment and so government should do something about the price of LPG particularly,” the former President stated.

Mr. Mahama further called on the government to do more to relieve consumers of the pressure.

“We [the NDC government] managed to stabilize the price of fuel in 2016 before we left. Even though we had deregulated, we found a way of making sure that prices remained stable. Now the extent to which [the price of fuel] keep going up is a worry, and so I think it  is something that government should look at.”

Situation on the ground

Checks by Citi Business News at some major Oil Marketing Companies showed that petroleum prices dropped by less than GHc1 at the pumps after Parliament passed the Special Petroleum Tax Amendment Bill to reduce that much-criticized tax from 15 percent to 13 percent.

The likes of Total, Shell and Goil were selling at a litre of Petrol at GHc 4.51. This represented a 3.5 percent reduction from the earlier GHc4. 67 pesewas.

Similarly, the price of a litre of diesel dropped from GHc4.67 to GHc4.49.

This meant the average price of a gallon of petrol and diesel at the pumps was about GHc 17, despite Former President Mahama’s assertion that the a gallon of fuel was around GHc 22.

‘Insignificant reduction’

The amendment to the tax followed recent protests on the rising cost of fuel, as well as calls from the minority for the Special Petroleum Tax to be scrapped.

The reduction did little to assuage the fears of some observers like the Institute of Energy Security (IES) and Dr. Charles Wereko Brobby, who slammed the reduction as insignificant.

The observers insisted that the Special Petroleum Tax should be scrapped completely.

About the Special Petroleum Tax

The Special Petroleum Tax Law was passed in 2014 as part of tax measures adopted by the government at the time to increase revenue generation and improve efficiency on revenue collection from petroleum products.

The Tax was initially set at 17.5%, but was reviewed downwards by 2.5 percent in the 2017 budget.

The law authorizes the Ghana Revenue Authority to collect the tax, which would be paid into the Consolidated Fund.

The petroleum products to be affected, according to the Finance Ministry include petrol, diesel, liquefied petroleum gas, natural gas and kerosene.

–

By: Neil Amatey Kanarku & Delali Adogla-Bessa/citifmonline.com/Ghana

The post Mahama slams gov’t over ‘high cost’ of fuel appeared first on Citi 97.3 FM - Relevant Radio. Always.

Like some observers, Mr. Rockson insists that the Special Petroleum Tax should be scrapped completely.

[contextly_sidebar id=”bVHXW71p9m0DJ6jNYRw5tplRtgOJfPJB”]”When you look through the price build up, it is one of the easiest you can take out because, apart from government earning revenues from that, it doesn’t have any special role to play in the price build up,” he said on Eyewitness News.

Mr. Rockson stated that even after the reductions, Ghanaians will continue to suffer in terms of how much they pay for fuel.

“Fortunately, we have had some reduction over the period but it is woefully insignificant. What is 2 percent going to do to the ordinary consumer when prices are currently at GH¢4.57?The excuse that government will lose revenue is untenable because the ordinary Ghanaian cannot continue to suffer in the name of revenue.”

He argued that the tax was needless because, among other things, government’s crude oil price benchmark at the time it was introduced was $57.5 per barrel but it has since exceeded this benchmark with $60 so “the special petroleum tax does not have a place today in the current system because we don’t have the same problem we had a few years ago.”

Parliament, on Thursday, passed the Special Petroleum Tax Amendment Bill to reduce the levy on petroleum products by two percent.

This was after recent protests against the rising cost of fuel, as well as calls from the Minority NDC MPs, whose government introduced the tax in 2014, for it to be scrapped.

ICU urges patience

The Industrial and Commercial Workers Union (ICU) was more receptive towards the reduction.

Also speaking on Eyewitness News, the ICU’s General Secretary, Solomon Kotei, remarked that “any relief that comes by way of price drops, industry obviously gets some relief in terms of what they also use the fuel for.”

Although his union had called for the scrapping of the tax, Mr. Kotei said he was satisfied because the government was on the right trajectory.

“We were praying and pushing for a total scrap. But if we didn’t get the scrap and this is the second time running government is reducing the same special petroleum tax by and additional 2 percent, we think gradually, that element will go out of the price programme and all Ghanaians will get that feel at the appropriate time… It goes to prove that our agitation and commentary on the issues is right.”

Background

The Special Petroleum Tax Law was passed in 2014 as part of tax measures adopted by the government at the time to increase revenue generation and improve efficiency on revenue collection from petroleum products.

The Tax was initially set at 17.5%, but was reviewed downwards by 2.5 percent in the 2017 budget.

The law authorises the Ghana Revenue Authority to collect the tax, which would be paid into the Consolidated Fund.

The petroleum products to be affected, according to the Finance Ministry include petrol, diesel, liquefied petroleum gas, natural gas and kerosene.

–

By: Delali Adogla-Bessa/citifmonline.com/Ghana

The post IES slams ‘insignificant’ 2% Special Petroleum Tax reduction appeared first on Citi 97.3 FM - Relevant Radio. Always.

The amendment comes after recent protests against the rising cost of fuel, as well as calls from the minority for the Special Petroleum Tax to be scrapped.

[contextly_sidebar id=”TCIhUYweIWIeF3oItP3XrtKioBT8HUNA”]Speaking to Citi Business News, a Deputy Finance Minister, Kweku Kwarteng, stated that making the Special Petroleum tax a specific levy would minimize its impact on consumers.

He explained that the amendment will protect Ghanaians in the future when petroleum prices go up on the international market.

“The Special Petroleum Tax was introduced by the Mahama administration. I do not think if they thought it was that bad, they would introduce it. When they introduced it, we did criticize it that they ought not to make it ad-valorem. They ought not to make it a percentage of the price because it will mean that as fuel prices go up, the taxes would also up,” he recalled.

According to him, the then New Patriotic Party (NPP) members  in Parliament did not describe the tax as needles, but rather pushed for it to be made a specific tax.

Mr. Kwarteng pointed out that the minority at the time insisted that the tax be made a specific tax, to cushion Ghanaians anytime there is a price hike on the world market.

“What we have demonstrated today [Thursday] is that which we believed in. That is why we have converted it from ad valorem to a specific tax. So if you want to know the exact impact, let’s wait a couple of months down the line when fuel prices are high and then you ask me if the special petroleum tax was still ad valorem.? what would have been the tax level, and then at that point you would be able to see the real significance of the amendment that we have achieved in parliament today,” he argued.

Admitting that the current amendment will not reduce the prices of fuel at the pumps, Mr. Kwarteng appealed to Ghanaians to appreciate the purpose of the reduction.

“There is some reduction, but our focus is not a reduction in the fuel prices now. It is a long-term strategy to ensure that consumers pay less as fuel prices go up in the international market,” he said.

–

By: Lawrence Segbefia/citibusinessnews.com/Ghana

The post Special Petroleum Tax reduced by 2% appeared first on Citi 97.3 FM - Relevant Radio. Always.