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The Politics of Petrol and Gov't Budgetary Needs and Forecasts

Mon, 21 Feb 2005 Source: Bottah, Eric Kwasi

The Government on Friday announced new fuel prices: Premium Petrol now sells at 30,000 cedis per gallon up from 20,000 cedis. Kerosene is now 24,000 cedis from 17,500 cedis; LPG has risen from 3,800 cedis per kilogram to 5,700 cedis; Pre-mix from 16,000 cedis to 21,000 cedis a gallon.

Gas Oil (Diesel) from 17,500 cedis per gallon to 26,500 cedis and Marine Gas oil from 16,000 to 21,000 cedis per gallon.

Mr. Kwadwo Baah-Wiredu, Minister of Finance, who announced this at a press conference in Accra, said transport fares would go up by 30 per cent as already agreed by the stakeholders in the transport business. He said the Tripartite Committee would come out with new basic salary, which would be announced in the budget next week. 19 Feb. 05.

The above price increments have generated a lot of heat both home and abroad. Some accuse the NPP of untruthfulness and even callousness. Somebody said Kufour could care less since he is not in the run for any reelection.

The question that needs to be asked is why governments, especially in the developing world jump rather quickly to impose heavy taxes on petroleum products?

I would like to think it is because of our weak revenue gathering and collection mechanism. We are very poor at collecting income taxes, and I don't mean that kind of fees people pay to sell their wares in the market, nor Land Poll. Those are mere municipal taxes. The way things are the government is so inadequate in getting a system in place that would make every citizen accountable. If you make or earn a living you should pay income tax. It is as simple as that. We have in Ghana a huge proportion of the people who earn some sort of living, they are self employed, and yet pay next to zero real income tax. These are the same people who would expect their roads to be paved, schools and hospitals properly funded, trash collected and a well equipped police and army to keep them safe. Whose money is the government going to use to run all those programs? Is it any wonder our governments are always globe trotting to get loans and grants to administer our country? The new catchy word for alms begging is called NEPAD. I would rather prefer to read that as KNEEPADS, as that is what the government is doing.

We have to get our priorities straightened. The tax burden should be spread fairly around so that those who are on fixed income and on government payroll do not get constricted and squeezed out. Our revenue collection is very inefficient and unbalanced and laborious to manage or maintained. The government thus sees indirect tax, import tax, VAT etc. as an easy, identifiable, and quantifiable source to harvest income. The nonsense is, the same Ghanaians that the governments helps along by subsidizing petroleum products, are the same people who would take advantage of higher prices in neighboring countries and smuggle the petroleum products to these countries to make a quick buck.

We are so silly we would rather pay 10% of our income to conmen parading as Apostles-Prophets in the form of tithes every Sunday, but would not do the same by the government. Some women would rather stifle their husbands to pay these churches rather than help in the household finance. One hot marriage dispute I was privileged to be invited to help settle went like this. The husband was a mere clerk in a company in Toronto Canada, even though he had a business administration degree from University of Ghana. This guy wanted to improve his lot so he registered in the CGA (Certified General Accountant) program in Canada. A time came when he needed money to register and participate in a course. To cut a long story short, this guy was turned down by the wife for help, yet the same wife could go and make a contribution of $2,000 Canadian Dollars at a church harvest.

Just tell me what sense it makes to doll out all the monies in Ghana (all the tithes plus offerings) to the mushroom churches while the government goes broke? Government and church which one does more for our lives and society? That is what I am talking about. We won't complain to dish out to churches of suspicious character, mission and purpose. We do that with enthusiasm, singing joyful songs, praises and dancing to the Pastor, sorry, to the Lord, but we would withhold taxes, especially income taxes from the government. Left to me the government would not subsidize at all petroleum products. Why should we subsidize anybody who would not pay income tax at all even though he makes an income, more often than not, more money compared to the average civil servant? Our cocoa farmers and producers of other exportable cash products pay their fair share, by way of the government paying them, through the produce buying agency, ridiculous prices below world prices, yet the fitting mechanic, carpenters, restaurant owners, store and street vendors, etc. do not. We should cut our coat according to our sizes. The petrol is not free and somebody must pay for it. I am just tired of this socialist apologetic delusion that we can buy our ticket to development on the cheap or at no cost at all. Let's pay as we go. It cannot be simpler than that.

We as a country are in some sort of vicious cycle, or development conundrum. This is how it goes. The government lacks firm grasp or grip on undocumented private citizens who are not on the government payroll. This group of people amount to over 70% of the working population. For the most part they are self employed. How many, we don?t know but they expect certain services like health, education, good roads, good governance which means all the benefits of a democratic society, protection, housing etc. These people misconstrue municipal fees such as ?lanpol? (i.e. Land Poll), property tax, parking lot fees, market stall fees etc. as income tax, which they are not. No government can carry out its programs without a regular and firm source of revenue. But since we live in a country where National Identity Card and Number is absent, the Ghana government in all sincerity cannot make a firm budgetary forecast, hence the often yawing gap between revenue and expenses. Unable to whip us into accountability, we humiliate ourselves by forcing the government to opt for no other choice but to go a-borrowing from foreign governments to close the budgetary deficiency and gap.

What is the solution? In my humble opinion I think the government as a matter of urgency embarks on a campaign to educate the masses on their civic duties of paying taxes. Secondly the government must implement or institute a National Identity Card and Number to document every Ghanaian living everywhere and anywhere to know how many Ghanaians are there, how many of them are able bodied working adults, what jobs they are doing, how much they make in a year, and how much income tax can be assessed. We should even take it further. If a person shows up at a school or hospital with his kid, he must provide proof of having paid income tax to get any service that is government funded. The nonsense of monkey works and baboon chops must stop. The civil servants and exportable cash crop farmers are overburden with the tax load, it is time we make the huge undocumented self employed working population, shoulder their portion. These are first to clamor for almost everything free, forgetting those services or commodities are not free. Somebody has to be paid to teach their children, the oil from abroad has to be paid for. If we fail to do this we would continue to adopt this quick fix method of heaving taxes on petroleum products and imports. We can?t tie down the government hands, deny it of revenue and expect them to perform wonders. If we want the services we so desire, we must pay for them, and that means ALL OF US Ghanaians, home and abroad, must pay our fair portion.

It can?t be simpler than that.

Eric Kwasi Bottah (alias Oyokoba)
Philadelphia, PA
USA

Views expressed by the author(s) do not necessarily reflect those of GhanaHomePage.

Columnist: Bottah, Eric Kwasi