Business News Sun, 2 May 2021

Ghanaians will be poorer if fuel taxes are not reversed - Head of Research at COPEC

Head of Research at the Chamber of Petroleum Consumers (COPEC) Benjamin Nsiah has insisted Ghanaians will wallow in abject poverty if the planned increment of fuel taxes is not overturned.

According to him, because petroleum products are infinite and affect the prices of goods and services, it will not be advisable for their prices to be increased, especially at a time where the country is rebounding from the adverse effects of COVID-19 on businesses and the economy

“Gov’t has seen that petroleum products are infinite and no matter how much they increase their (Petroleum Products) prices, Ghanaians will still buy them”, he said.

Agreeing petroleum products are infinite, Benjamin argues that a spike in price has a ripple effect on the country’s economy.

“When this happens, the trotro driver will increase lorry fares, traders will also increase the price of their goods. The ordinary Ghanaian will now suffer more because they will pay more for the same product or pay more for less”.

For Benjamin, if the government refuses to withdraw these impending taxes, “then it is their plan to force Ghanaians into poverty. But if gov’t truly doesn’t want to increase poverty amongst Ghanaians, then the 17 pesewas unilateral cumulative increase by the NPA to the already neck-breaking 30p/litre should be removed. We are now emerging from the effects of COVID-19 and if taxes are increased, there will be a problem”.

On his authority, the country cannot bring back the economy by forcing its citizens into poverty. He believes the Ghanaian economy can only rebound with the country finding ways to increase production.

Suggesting other ways government can reduce the tax burden on the citizenry in an interview on Happy98.9FM’s Epa Hoa Daben political talk show, Benjamin Nsiah said, “The government needs to widen the tax net and make sure that every Ghanaian pay their taxes. Through technology and other means, the government can also close loopholes through which some unscrupulous people evade taxes”.

The Chamber of Petroleum Consumers, Ghana has predicted that the country is on the verge of being hit with another astronomical increase in the cost of fuel at the pumps effective 1st May 2021.

Portions of a press release signed by Executive Director of COPEC, Duncan Amoah titled 'This Insensitive Fuel Price Increment Must Be Withdrawn Immediately' read;

Ghanaians are on the verge of being hit with another astronomical increase in the cost of fuel at the pumps at the fuel retail outlets effective tomorrow the first day of May.

At the current fuel price averages of Ghc 5.40/litre, most Ghanaians have expressed misgivings about the high cost of fuel leading to an increase in costs of living and hardships and expected nothing but policy measures In helping reduce these harsh prices at the pumps.

Contrary to these expectations, the 2021 budget indicated some upward reviews on two taxes namely the Energy Sector Recovery Levy and Sanitation and Pollution levy of 20p/litre and 10p/litre respectively totalling 30 P per litre

As though these two additions which have met a lot of public resistance and misgivings were not enough, the National Petroleum Authority unilaterally has also added another 17p cumulative to the already neck-breaking 30p/litre and this is also expected to take effect from tomorrow together with the parliamentary approved 30p/litre.

What this means is that Ghanaians will have to cough up 47p/litre instead of the 30p/litre as approved from the budget.

Bost margin has been increased by the NPA by 100% from the current 6p/litre to 12p/litre, whiles UPPF has been increased from 27p to 30/litre, Primary Distribution Margin has been increased from 8p to 11p/litre and Fuels marking Margin has also been increased from 3p to 8p/litre

What this means is that the NPA unilaterally has added in excess of 3.2% on current pump prices in addition to the 5.5% new taxes from the 2021 budget. This leads to a fuel price increment of about 8.7% of current prices.

We believe the NPA is becoming a burden on Ghanaians and will need to be reigned in by the authorities from these arbitrary increases at a time as this when the harsh effects of Covid 19 on businesses and individuals are still raging.

Whiles, it is on record the country is losing billions of cedis in revenue to the fuel smuggling phenomenon and for which reason we think comprehensive efforts by the state should be directed at blocking the cartel engaged in this act to deliver the needed revenues to the state, we object to any attempts to simply continue adding taxes and unnecessary margins on the fuel price build-up which only adds to the increasing hardships on Ghanaians.

We are by this calling on authorities to reign in the NPA to immediately withdraw these new add ons as any attempts to force these unilateral increases by the NPA using the backdoor on Ghanaians will be steeply resisted.
Source: www.etvghana.com
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