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Ghana: New Tax on Petroleum Products

(Dec. 2, 2014) On November 19, 2014, Ghana’s Parliament adopted into law controversial legislation that introduces a special petroleum tax of 17.5% on certain petroleum products. The products include “petrol, diesel, liquefied petroleum gas (LPG), natural gas and kerosene.” (Eric Kwaku Kegya, Ghana: Special Petroleum Tax Bill Enacted, TAX NEWS SERVICE (Nov. 21, 2014), International Bureau of Fiscal Documentation online subscription database.) The Special Petroleum Tax Law 2014 “forms part of tax measures adopted by government to increase revenue generation and improve efficiency on revenue collection” from these products. (Press Release, Government of Ghana, Ghana: Special Petroleum Tax Bill Passed into Law, ALLAFRICA.COM (Nov. 20, 2014).)

The legislation was hotly debated, and the Minority Caucus in Ghana’s Parliament staged a walkout to protest imposition of the measure. (Minority MP’s [sic]Walk Out on Gov’t’s Imposed 17.5% Special Petroleum Tax, MYGHANA ONLINE (Nov. 19, 2014).) Its passage came soon after the presentation of the country’s 2015 budget, and the targeted revenue for 2015 took into account the revenues to be derived from the new tax from November 2014 to December 2015, according to James Avedzi, Chairman of the Finance Committee. Hence it had been presented to the Parliament under a certificate of urgency by the Minister of Finance, which allows for passage of legislation in one day. (Id.; Kwaku Kegya, supra.) The new tax is expected to realize GHc1.541 billion (about US$46,662) during the period of its imposition. (Press Release, supra.)