Dr. Kwabena Donkor, a former minister under the erstwhile President Mahama, has urged the Akufo-Addo-led government to take steps to recover an amount of GHS650 million in petroleum taxes from Oil Marketing Companies (OMCs). He indicated that the oil companies are filled with fraudsters and racketeers who siphon taxes and get away.
Dr. Donkor warned that unless the government took action, the OMCs would continue to flout their tax obligations with impunity. He called on Nana Addo’s administration to send a strong signal that it would not tolerate such behaviour and urged them to take all necessary measures to ensure that the money was recovered without delay.
According to data obtained from the Ghana Revenue Authority, 70% of revenues generated by the petroleum industry are still owed to the government as taxes. This situation is unacceptable because there are so many things the government can do with this money. The comments by the Member of Parliament should not be politicized but rather act upon to help the economy of Ghana. Government has a responsibility of ensuring that all state institutions are functioning properly and efficiently. Government must take action and retrieve this amount of money considering the current economic situation in Ghana.
What We Face Now
The Ghana Revenue Authority (GRA), collects about GH7 billion as Value Added Tax (VAT) annually but only 30 percent, amounting to GH2.1 billion are been paid out as statutory transfers and other grants. The country loses about GH4.9 billion through tax siphoning from companies like OMCs.
The consumption of crude oil, gas, and derived petroleum products such as petrol, diesel, and kerosene, matters a lot in the daily lives of Ghanaians. From January to June, fuel prices in Ghana have increased steadily as the government also add taxes to the oil obtained from abroad. High prices of fuel increase the cost of living in the country and burden the citizens.
Prices of goods and services in the country have been on the rise and drivers and many industry players have linked it to the high prices of fuel. So if the government placed taxes on petroleum products and allow these companies to evade taxes to the detriment of the ordinary Ghanaian then Ghana needs to go back to the drawing board.
The Way Forward
Government has to establish a debt recovery unit within the Ministry of Finance to help boost tax collections. By doing so, the government can recover a significant amount of money that can be used to improve the lives of Ghanaians. This would send a strong message to other companies that might be considering evading tax. Government should put in measures and strong deterrents so that tax evasion and siphoning will seize.