Energy Ministry rejects calls to scrap special petroleum tax

The Ministry of Energy has rejected calls by the Chamber of Petroleum Consumers Council, to scrap the special petroleum tax on petroleum products.

According to the Head of Communications at the Energy Ministry, Nana Damoah, scrapping the special petroleum tax will be detrimental to governments’ ability to raise revenue to tackle the energy sector debts.

The Chamber of Petroleum Consumers Council, last week called on government to scrap the special petroleum tax as it has outlived its usefulness and as such overburdening the ordinary Ghanaian.

But speaking to Citi Business News, Nana Damoah revealed that revenue estimations from the energy sector will be seriously affected if the special petroleum tax is removed.

“What we know is that after coming into power we have tinkered with the taxes on petroleum. We’ve removed the excise tax and reduced the special petroleum tax by 2.5%. We’re continuing to do extra work. But then as the petroleum price build up stands now, looking at the revenue estimation and the debt found in the energy sector among other factors, it will be quite detrimental to remove the special petroleum tax without having conducted some studies and possible adjustments.”

The Chamber of Petroleum Consumers Council in calling for the removal of the special petroleum tax argued that the tax is not only a nuisance but avoidable in the face of rising prices on the world market.

The Special Petroleum Tax initially 17.5%, was placed on petroleum products by the erstwhile NDC government in 2015.

Though the NPP government had criticized its introduction, it only reviewed it downwards by only 2.5 percent in the 2017 budget.