With the introduction of new taxes on petroleum products, it is projected that government will bag approximately GH¢3.9 billion (GH¢3,969,255,357.46) from petroleum taxes in 2016 alone, on an estimated 3.6 billion (3,687,235,032) litres of petrol, diesel and liquefied petroleum gas (LPG) to be imported into the country.
Last year, Ghana imported an estimated 3.6 billion (3,687,235,032) litres of petrol, diesel and liquefied petroleum gas, and the 2016 tax revenue projection is based on this figure.
Out of the GH¢3.9 billion, new and revised taxes in the Energy Sector Levies Act, 2015, which has resulted in upward adjustments in the price of petroleum products by as much as 27%, will account for GH¢3.2 billion (GH¢3,230,025,731.88).
It is estimated that government made GH¢739,229,625.58 from the 3.6 billion (3,687,235,032) litres of petrol, diesel and liquefied petroleum gas (LPG) imported into the country last year.
Consequently, the implementation of the Energy Sector Levies Act, 2015 has increased petroleum taxes to government by over 300%.
Total revenue target in the 2016 budget is GH¢38 billion, and GH¢3.9 billion is coming from petroleum taxes alone.
This demonstrates the importance of the petroleum sector to revenue generation for nation building.
The GH¢3.9 billion to be generated from petroleum taxes this year alone is close to the GH¢4.5 billion (GH¢4,514,070,092.81) generated from petroleum taxes between 2011 and 2015, a period of five years.
Power generation and infrastructural support (GH¢1 billion)
The power generation and infrastructural support, which is estimated to generate GH¢1 billion (GH¢1,032,425,808.96), would be used to support the payment of power utility debts, facilitate power generation and infrastructure support, ensure power supply sustainability to achieve a secure, reliable and quality electricity, as well as support power infrastructure risk mitigation, including partial risk guarantee.
Road Fund (GH¢1.3 billion)
With the new taxes, revenue from the Road Fund, which supports road maintenance, jumped by over 300% to GH¢1.3 billion (GH¢1,365,778,344) instead of the GH¢250 million that would have been generated if the increases had not been done.
TOR debt recovery (GH¢284 million)
Even though government is yet to declare how much has been collected ever since Tema Oil Refinery (TOR) debt recovery was instituted in 2004, the levy is expected to bag GH¢284 million (GH¢284,067,235.68) this year to facilitate the debt recovery of TOR.
Energy Fund (GH¢34 million)
Following the new levies and taxes, Energy Fund, which supports the Energy Commission’s activities, also increased from GH¢1m (GH¢1,707,222.93) to GH¢34 million (GH¢34,144,458.60).
Price stabilisation and recovery levy (GH¢399 million)
Price Stabilisation and Recovery Levy, established to be used as a buffer for under-recoveries in the petroleum sector, stabilise petroleum prices for consumers, as well as subsidise premix and RFO, will rake in GH¢399 million (GH¢399,026,797.20).
Tax revenue per product
PETROL
The 1.5 billion (1,515,164,700) litres of petrol estimated for 2016 could generate approximately GH¢1.7 billion (GH¢1,722,992,266.08).
DIESEL
For diesel, the 1.8 billion (1,899,281,160) litres is estimated to generate over GH¢2 billion (GH¢2,093,292,730.49).
LPG
LPG imports of 272,789,172.00 litres will bag tax revenue of GH¢152 million (GH¢152,970,360.89).
According to government, the GH¢4.5 billion debt is responsible for the power crisis in the country.
Power Generation and Infrastructural Support Fund will bag GH¢1 billion (GH¢1,032,425,808.96) this year, and this would help in paying that debt.
New and revised levies/taxes to generate GH¢3.2bn
It is projected that new taxes introduced on petroleum products will generate about GH¢3.2 billion (GH¢3,230,025,731.88) this year alone based on an estimated 3.6 billion (3,687,235,032) litres of petrol, diesel and liquefied petroleum gas (LPG) imported into the country last year.
It is estimated that 3,687,235,032 litres of petroleum products, comprising 1.5 billion (1,515,164,700) litres of petrol, 1.8 billion (1,899,281,160) litres of diesel and 272 million (272,789,172) litres of LPG, were imported into Ghana last year.
With the increments, if the country should import same quantities this year, 1.5 billion (1,515,164,700) litres of petrol will generate GH¢1.3 billion (GH¢1,309,013,019.72); 1.8 billion (1,899,281,160) litres of diesel will bag GH¢1.7 billion (GH¢1,768,042,351.27) while 272 million (272,789,172) litres of LPG will generate GH¢152,970,360.89 in taxes.
The GH¢3.2 billion (GH¢3,230,025,731.88) is made up of new levies and existing levies revised upwards.
Excise duty is expected to raise GH¢1,976,630.34 this year.
New levies/taxes
Under new levies, the amounts to be generated from the various taxes are Energy Debt Recovery Levy, GH¢184million (GH¢184,361,751.60); Power Generation and Infrastructural Support Fund, GH¢1billion (GH¢1,032,425,808.96); Tema Oil Refinery (TOR) Debt Recovery Levy, GH¢248 million (GH¢284,067,235.68); and Price Stabilisation and Recovery Margin, GH¢399million (GH¢399,026,797.20).
Revised levies/taxes
For the revised levies, Road Fund Levy will raise GH¢1.2 billion (GH¢1,115,735,059.23) while Energy Fund will amount to GH¢32 million (32,437,235.67).
New taxes by product
PETROL
Petrol Tax - GH¢1.3bn (GH¢1,309,013,019.72)
The breakdown of the new taxes on petrol is: Energy Debt Recovery Levy, GH¢75,758,235; Power Generation and Infrastructural Support Fund, GH¢424,246,116; TOR Debt Recovery, GH¢121,213,176; Price Stabilisation and Recovery Margin, GH¢181,819,764.
DIESEL
Diesel Tax - GH¢1.7bn (GH¢1,768,042,351.27)
For the diesel, Energy Debt Recovery Levy will amount to GH¢94,964,058; Power Generation and Infrastructural Support Fund, GH¢531,798,724.80; TOR Debt Recovery, GH¢151,942,492.80 and Price Stabilisation and Recovery Margin, GH¢189,928,116.
LPG
LPG Tax - GH¢152m (GH¢152,970,360.89)
Taxes to be generated by LPG are Energy Debt Recovery Levy, GH¢13,639,458.60; Power Generation and Infrastructural Support Fund, GH¢76,380,968.16; TOR Debt Recovery, GH¢10,911,566.88; and Price Stabilisation and Recovery Margin, GH¢27,278,917.20.
Revised levies/taxes
PETROL
Under revised levies, Road Fund Levy on petrol will generate GH¢495,108,853.85 whilst Energy Fund will accrue GH¢414,394,064.65.
DIESEL
For diesel, Road Fund Levy is expected to generate GH¢620,626,205.37 and Energy Fund will accrue GH¢18,043,171.02.
LPG
In respect of LPG, the revised levies are Road Fund Levy, GH¢1,115,735,059.23; and Energy Fund, GH¢32,437,235.67.
Analysis of taxes and revenue after increment
Excise duty is expected to rake in GH¢78 million (GH¢78,285,269.88).
Energy Debt Recovery Levy
The breakdown of other taxes include Foreign Exchange Under-recoveries, GH¢184 million (GH¢184,361,751.60); Power Generation and Infrastructural Support Fund, GH¢1 billion (GH¢1,032,425,808.96); TOR Debt Recovery Levy, GH¢284 billion (GH¢284,067,235.68).
The rest are Price Stabilisation and Recovery Margin, GH¢339 million (GH¢399,026,797.20); Road Fund Levy, GH¢1 billion (GH¢1,365,778,344); Energy Fund, GH¢34 million (GH¢34,144,458.60); and Impact on Special Petroleum Tax, GH¢591 million (GH¢591,165,691.54).
PETROL
Excise duty on petrol amounts to GH¢42,121,578.66.
Energy Debt Recovery Levy
The other tax revenues are Foreign Exchange Under-recoveries, GH¢75 million (GH¢75,758,235); Power Generation and Infrastructural Support Fund, GH¢424 million (GH¢424,246,116); TOR Debt Recovery, GH¢121 million (GH¢121,213,176); and Price Stabilisation and Recovery Margin, GH¢181million, (GH¢181,819,764).
The others are Road Fund Levy, GH¢606 million (GH¢606,065,880); Energy Fund, GH¢15 million (GH¢15,151,647); and Impact on Special Petroleum Tax, GH¢256 million (GH¢256,615,869.42).
DIESEL
Excise duty on diesel for 2016 is expected to raise GH¢34,187,060.88.
Energy Debt Recovery Levy
Additionally, foreign exchange under-recoveries, GH¢94 million (GH¢94,964,058); Power Generation and Infrastructural Support Fund, GH¢531 million (GH¢531,798,724.80); TOR Debt Recovery, GH¢151 million (GH¢151,942,492.80); and Price Stabilisation and Recovery Margin, GH¢189 million (GH¢189,928,116).
The rest are Road Fund Levy, GH¢759 million (GH¢759,712,464); Energy Fund, GH¢18 million (GH¢18,992,811.60); and Impact on Special Petroleum Tax, GH¢311 million (GH¢ 311,767,002.41).
LPG
Revenue from Excise Duty is projected to amount to GH¢1 billion (GH¢1,976,630.34 ).
Energy Debt Recovery Levy
The other taxes are Foreign Exchange Under-recoveries, GH¢13 million (GH¢13,639,458.60); Power Generation and Infrastructural Support Fund GH¢76 million (GH¢76,380,968.16); TOR Debt Recovery, GH¢10 million (GH¢10,911,566.88); Price Stabilisation and Recovery Margin, GH¢27 million (GH¢27,278,917.20); Impact on Special Petroleum Tax, GH¢22 million (GH¢22,782,819.71).
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