Policy Analyst, Peter Terkper has called on government to make some tax revenue sacrifices to ensure lower fuel prices this year.
According to him, even though the government has no jurisdiction of the price appreciation and depreciation of crude oil on the international market, it has the power to control how Ghanaian consumers are affected by these changes by adjusting taxes on petroleum products.
Speaking on JoyNews’ PM Express, he cited the Special Petroleum Tax which he says has become redundant following significant shifts in the world oil market.
He said, “if you look at the price buildup, the Special Petroleum Tax for instance was introduced somewhere in 2014 where the prices of petroleum had gone down in the world market and looking at government revenue which will be short, government realized that ‘okay let’s do something to close the gap’.
“So this tax was introduced at that time to be able to close the gap between the fall in the oil price and then the shortfall in government revenue as well. And from 2014 to now, prices have devolved. Why are we still keeping this tax? And this is 46 pesewas.”
According to Peter Terkper, because the government’s main stream of income is from taxation, it has become difficult for successive regimes to scrap taxes that have clearly become unnecessary.
“But because the main source of revenue for government is taxation, it is very difficult when one regime introduces a tax and another regime comes and they say they will take it out even when a lot of nice is made about it during its introduction, once they come in because that is where they generate revenue, it is then difficult for them to say we’re scrapping it,” he said.
He stated that it was about time the government made the bold move of scrapping the Special Petroleum Tax to ease the burden on Ghanaians, instead of finding justification for fuel price hikes with world oil market figures.
“But looking at the situation we find ourselves now, government needs to sacrifice at some level. The reason is that anytime these petroleum price increase comes up is only when we hear prices are going up at the world market, government is not doing anything about the taxes that it has introduced,” he said.