It appears the desire of the Mahama-led National Democratic Congress (NDC) government to squeeze Ghanaians by way of taxes knows no bounds. This is because aside taxing Ghanaians through the collection of domestic taxes, which includes Value Added Tax (VAT), direct and indirect taxes, National Health Insurance levy, services rendered by the various banks, among others, the ruling government is also taxing the good people of this country through the purchase of finished petroleum products.
In-depth investigations conducted by The Chronicle indicate that Ghanaians are paying in excess of Seven Ghana Cedis (GH¢7.00) on every gallon of petrol they buy as tax. According to the information, the ex-refinery price, which is the total cost of the crude oil, processing, exchange rate and transportation by which the Bulk Oil Distribution Companies (BDCs) sell petrol or super to the Oil Marketing Companies (OMCs) is GH¢6.34.
Two other components namely; marketers and dealers (retailers/operators) margins, which are GH¢0.72 and GH¢0.50 respectively meant for those who market the products and other dealers and operators in the transaction chain are added to bring the total cost on the part of the dealers to GH¢7.56.
Aside this, government adds 10 other components, which are classified as taxes, levies and margins before arriving at the ex-pump price. The 10 other components include; excise duty, energy debt recovery levy, road fund, energy fund, price stability & recovery levy, primary distribution margin, Bulk Oil Storage and Transportation (BOST) margin, fuel marking margin, special petroleum tax and UPPF.
The taxes, levies and margins mentioned above, amounting to GH¢7.13 - all of which go into the national kitty are added to the ex-refinery price to arrive at the ex-pump price of GH¢14.67, which is the cost of a gallon of petrol sold at the filling stations. The following is the breakdown - excise duty-GH¢0.13, energy debt recovery levy-GH¢1.85, road fund- GH¢1.80, energy fund - GH¢0.05 and price stability & recovery levy - GH¢0.54.
The rest are; primary distribution margin - GH¢0.20, BOST margin - GH¢0.14, fuel marking margin - GH¢0.07, special petroleum tax - GH¢1.94 and UPPF- GH¢0.41 .The investigation also revealed that those who purchase a gallon of diesel end up paying in excess of Six Ghana Cedis and Fifty Ghana Pesewas (GH¢6.50) as tax. Once again, the ex-refinery price for diesel, the paper gathered is GH¢6.38.
The marketers margin as well as the dealers (retailers/operators) margins, which are GH¢0.72 and GH¢0.50 respectively added to the ex-refinery price brings the figure to GH¢7.60. These are the breakdowns - excise duty-GH¢0.08, energy debt recovery levy-GH¢1.85, road fund- GH¢1.80, energy fund - GH¢0.05 and price stability & recovery levy - GH¢0.45.
The rest are; primary distribution margin - GH¢0.20, BOST margin-GH¢0.14, fuel marking margin-GH¢0.07, special petroleum tax- GH¢1.93 and UPPF - GH¢0.41
But, Senyo Horsi, Chief Executive Officer of the Chamber of Bulk Oil Distribution Companies (BDCs) believes that the taxes are very necessary to fill in some of the fiscal gaps in the economy, especially the energy sector, following the subsidies government put on petroleum products when prices of crude oil went all time high.
"... I think that it is just a reflection of the need for us as a country to have an honest position about subsidies. Subsidies that are not budgeted for are not going to be funded by any magical wand." According to him, as a people, we should ask ourselves whether it would not be proper for us to rather pay the right prices for petroleum products so we don't have to face long spell of new taxes to pay old liabilities that have resulted from subsidies.
He stated; "I am pretty sure that if all the subsidies that we have incurred as of now had been passed on back then, we wouldn't be faced with this kind of problems." He explained that Ghanaians benefited from subsidies when prices of crude oil went up very high, because there was a fiscal policy that compelled leadership of the country at the time to do so.
"I do agree that we have an all-time low as far as petroleum prices are concerned on the international market, but in the same vein, when we had an all time high, government did not pass on the full prices, the BDCs were the major sufferers of the particular fiscal policy.
"So if today we have an all time low, I think that it is only reasonable to expect that you are going to have a smoothen of the effect, in that once you did not have the full price when you had an all time high, we did not bear the full brunt, the same way that we would not also bear the full time benefits when you have all time low", Mr. Horsi noted.
Continuing, the CEO of the BDCs said the time had come for Ghanaians to have an honest debate about subsidy, whether it is good for our country or not as it has the potential to destroy our banking system.
"Right now BDCs owe heavily, VRA owes heavily, so BDCs would have to be paid, otherwise the entire banking system will come to its knees, and when the financial system comes to its knees, you know what will happen."
Explaining further, Horsi noted that when the financial system breaks down, as a nation, we would face with the emergence of more DKMs in the system, adding "no government would sit down for such a thing to happen. So we would have to tackle the problem with the right fiscal policy. Look at the TOR debt recovery. That tells you that any kind of subsidy we were benefiting probably throughout that period was never free", he stressed.
He posited that when we allow subsidies to dominate the life of our crawling economy, it would get to a time when residents may react and say we are voting government out, but if we do so, would that actually change anything regarding subsidies? He therefore called on Ghanaians to disregard any politician who would come to them, especially in this election year to promise them any form of subsidy when they have not budgeted for it.
Mr. Horsi hinted that these same politicians would turn around and come back and tax us to pay for what we thought they had given us for free some time ago, stressing: "There is no free lunch anymore. So we should all start facing off with every politician who will be promising all kinds of things about petroleum and power or general utilities, head on that whatever you are promising is not really viable or sustainable.
"They would be promising us subsidies today to get our political support. They are the same people who will come back and tax us to pay back something that we thought they were giving us for free, or doing us a favour. "There is no favour in this business. The commodities are very expensive and it is going to be quite unsustainable for economies like ours", the CEO of the BDCs insisted.
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