According to Seth Terkper, former finance minister, the government is unable to pay petroleum product subsidies or restrict its consumption of petroleum products since the money for the subsidies has been collateralized.
The Energy Industry Levies Act (ESLA) 2015, Act 899, as amended, was created by the government to combine levies collected throughout the sector, fund electricity generation, and pay off legacy debts amassed within the sector.
This was to support road maintenance, provide funding for the regulation, management, development, and utilization of sustainable energy resources under the Energy Commission, provide capital for investments in public lighting and the National Electrification Programme, and subsidies Premix and Residual Fuel Oil.
According to Seth Terkper, following the collateralization of the ESLA, the monies are no longer available to be used for their intended purposes. He stated, “the reasons why the government cannot pay subsidy or it cannot reduce taxes are simple. The monies for the subsidy have been collateralized as part of ESLA; because we had built that money, that’s the Price Stabilization Levy, part of it was used to pay the outstanding subsidy, and then we started the strategic stocks with TOR bond. Today as we speak that money is not available, it’s been collateralized for the ESLA bond. What did we do with that money?”
He also added that much of the energy sector levies were in ESLA, and that is what ESLA is all about. These account for the inability of the government to reduce taxes because they need money to service the ESLA bond. He said this on Thursday during an interview on Joy FM’s PM Express.
How long will we continue to pay taxes to the government which will be used for unintended purposes? Is the economic hardship Ghanaians are facing currently not evident to our leaders? We pay high taxes yet our livelihoods are not improving. It appears that the government has its agenda for the utilization of our taxes, and it must be held accountable for it.