2021 Budget: The government is considering imposing a new fuel tax

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Following the 2021 budget, the government intends to levy a new tax on petroleum products.
The Sanitation and Pollution Levy is a new tax that will be used to finance efforts to invest in sanitation and pollution.

The Energy Sector Levies Act imposes a levy of 10 pesewas on the price of a litre of petrol/diesel (ESLA).

If the plan is approved, Ghanaians will face additional price increases at the pump.

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Osei Kyei-Mensah-Bonsu, the caretaker Minister of Finance, outlined “critical investments that must be made for the good and integrity of all Ghanaians” in his 2012 budget.

Among several other factors, the government wants to promote fumigation of public spaces, schools, health centers, and markets; revamp or rebuild poorly maintained landfill facilities; and build more waste treatment plants, both solid and liquid, in strategic locations throughout the country.

“These would ensure long-term sanitation management, improve quality of life, and reduce the number of deaths and diseases caused by poor sanitation,” said the caretaker Finance Minister.

READ MORE: Budget 2021: Trotros and taxis will be exempt from income tax, while hotels and restaurants will receive a 30% rebate.

The government intends to use the levy funds to:

  1. improve urban air quality and combat air pollution;
  2. Help with the re-engineering of landfill sites in Kpone and Oti.
  3. Support fumigation of public spaces, schools, health centres and markets; iv. Revamp/reconstruct poorly managed landfill facilities;
  4. Construct more sustainable state-of-the-art waste treatment plants both solid and liquid in selected locations across the country
  5. Construct waste recycling and compost plants across the country;
  6. Construct more sanitation facilities to accelerate the elimination of open defecation.
  7. Construct final treatment and disposal sites for solid and liquid waste;
  8. Provide dedicated support for the annual maintenance and management of major landfill sites and other waste treatment plants and facilities across the country; and
  9. Construct medical waste treatment facilities to prevent generation of infectious diseases especially under the Coronavirus Treatment Programme.

The other proposed tax in the budget is the COVID-19 Health Levy of 1 percent on VAT, Flat Rate Scheme and 1 percent on the National Health Insurance Levy (NHIL) as part of revenue measures to help the economy recover from the effects of the coronavirus pandemic.

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