The Minority in Parliament has criticised the government’s decision to increase the fuel oil levy from GH¢0.24 per litre to GH¢1.93 per litre. They believe the increase will make life more expensive for businesses and consumers, while doing little to stop fuel smuggling.
The new levy was introduced through changes to the Energy Sector Levies framework. According to the government, the increase is meant to reduce revenue losses caused by fuel smuggling and the misuse of fuel subsidies.
However, the Minority argues that the government should focus on improving enforcement and ensuring that operators follow the rules instead of raising taxes.
Speaking during the debate on the Energy Committee’s report on the levy, Tano North MP, Dr Gideon Boako, said increasing taxes would only affect businesses that already comply with the law, while smugglers would continue their illegal activities.
“Once the hunter has learnt to shoot without missing, the bird also goes flying without perching. So there is no justification or indication that if we introduce additional tax, the smuggling will stop,” he said.
Dr Boako also questioned why the government had not invested more in better tracking systems and electronic monitoring to fight fuel smuggling.
He explained that although companies are legally responsible for paying the levy, they are likely to recover the extra cost by increasing the prices of their goods and services, meaning consumers will end up paying more.
“If a company or a manufacturing company relies on fuel oil for boilers, generators or industrial heat, any additional cost by way of this tax will be passed on to the consumer,” he said.
He warned that the higher levy could make it harder for Ghana to keep inflation under control because businesses would face higher production costs, which could lead to higher prices for consumers.
“At a time that Ghana is talking about lower inflation, we should not, by the introduction of a new bill, do anything that has a cascading effect on inflation,” Dr Boako added.
The Minority maintains that the government should strengthen enforcement, close loopholes, and stop revenue leakages instead of increasing taxes on businesses and consumers.
They believe this approach would be a more effective and lasting solution to the problem of fuel smuggling.
