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Remove energy sector levy to cushion consumers, says Terkper

Seth Terkper

The former minister of finance Seth Terkper has reiterated calls for the government to scrap the Energy Sector Levy Act (ESLA) and remove the levy from the petroleum price build-up to help stabilise fuel prices at the pump.

He reiterated that the Energy Sector Levy has outlived its purpose and needs to be scrapped to alleviate the negative impact on citizens.

“So minimum, ESLA is going to remain per my estimation. This may also account for why it has become difficult for ESLA to reduce pump prices. Because if you reduce the pump prices, remember you have pledged to the markets that there will be sufficient revenue to meet the debts you have taken.

“But, it will be a shame to see ESLA become a permanent tax … given its characterisation as a nuisance tax … if we did that, the real nuisance is yet to come,” he noted.

Seth Terkper was speaking at a public forum organised by PFM-Tax Africa Network ahead of the 2022 Budget Statement and Economic Policy.

“Nuisance taxes”

ESLA plc is a special-purpose vehicle, incorporated as a public limited liability company under the Energy Sector Levies Act 2015 to issue long-term bonds to clear accumulated energy sector legacy debts, provide funding for power generation and support road maintenance, among other functions.

Last month, the National Democratic Congress (NDC) urged the government to scrap all new and existing “nuisance” taxes on petroleum products immediately to stabilise fuel prices in Ghana.

At a press conference then, the NDC argued that “the introduction of a GHp20 energy sector levy on every litre of diesel and petrol, the increase of GHp18 in ESLA per kilogram of liquid petroleum gas, GHp10 pesewas sanitation tax on a litre of diesel and petrol, among others, as well as the free fall of the local currency, were major factors responsible for the persistent and steep increase in the prices of fuel products”.

Nicholas Brown

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