Government justifies 18 pesewa tax on LPG

Government has the option to increase prices of Liquified Petroleum Gas at any time inline with prices on the global market, Kwaku Kwarteng, Chairman of the Finance Committee of Parliament has said.

His comments is coming on the back of calls for government to scrap the 18 pesewas tax on every kilogram of gas with immediate effect.

Speaking on the Big Bulletin with Beatrice Adu on Wednesday, 14 April, Kwarteng said government cannot exclude LPG from taxation.

It’s a different discussion, I don’t know why we should exclude certain products from taxation,” he said.

Kwarteng added “Let’s remember that if government does not apply certain taxes or seek to get revenue from certain taxes, then the fiscal will get hurt, i.e. we are going to spend more money than we are able to mobilize revenue for.”

Lawful increment 

He said arguments that government failed to capture the tax in the 2021 does not make it unlawful.

This is not unlawful, this is not the first time, whenever government want to bring a bill to Parliament, that bill needs not to be mentioned in the budget statement”

He argues that it will be in the best interest of the poor if the economy is stable.

“The gap increases, the microeconomy destabilizes, prices rise on the market and it is the poor that suffers, micro economic stability brings for me benefit to the poor more than the rich.”

Scrap tax on LPG

The Liquified Petroleum Gas Marketing Companies Association of Ghana is calling for the scrapping of 18 pesewas tax on every kilogram of gas with immediate effect.

A statement issued by the Association said the introduction of the hike in the energy sector levies’ act defeats government’s policy to increase the penetration of LPG from 25 to 50 percent by 2030.

The Association believes the move also contradicts government’s quest to help the poor and alleviate poverty.

“This increase in tax on LPG came as an unpleasant surprise to Ghanaians in general, and the LPG industry in particular, as it was communicated in paragraph 260 of the 2021 budget that the proposed energy sector recovery would only affect petrol and diesel,” the statement said.

Below is the full statement:

Background

The Minority spokesperson on Finance, Cassiel Ato Forson, last week alleged government has introduced an 18-pesewa increment on a litre of LPG.

This additional levy, according to Forson, was not captured in the 2021 budget statement which has since been approved by Parliament.

Fred Dzakpata

Gh Extractives

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