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Business News of Tuesday, 30 August 2016

Source: classfmonline.com

VAT on fuel: Who are the beneficiaries? – COPEC

Fuel pumps file photo Fuel pumps file photo

The Executive Council of the Chamber of Petroleum Consumers Ghana (COPEC) has raised questions about which institutions are benefitting from the 17.5 per cent Value Added Tax (VAT) imposed on petroleum products.

The new Energy Sector Levy Act passed in 2015 imposed seven taxes on petroleum at the pump including VAT. However, with the exception of the VAT, the beneficiaries of the remaining taxes have been clearly defined by law.

The Council – which includes the Industrial and Commercial Workers Union (ICU), Association of Ghana Industries (AGI), Ghana Private Roads Transport Union (GPRTU), among others – wants government to explain how the VAT proceeds are being applied.

It said it also intended to write to all beneficiary institutions of other taxes to find out whether they had been receiving the funds as prescribed by law.

Speaking to Class Business on the issue, General Secretary of the Industrial and Commercial Workers Union (ICU), Mr Solomon Kotei said: “We have the element of the double taxation and this is what is worrying. Let’s take for example the 32.5 per cent that has also been slapped on petroleum products. We are asking ourselves, ‘Who is the beneficiary of that tax? Who is that tax going to?’ Because [with] the others, you see clearly the type of levy on which the taxation is applied to; it can be identified. But the 17.5 per cent, we don’t see who is accounting for it and we have tasked the committee to get back to the beneficiary companies or institutions to find out if the taxes are sent to them or where does it go and what they also intend to use the monies for. … So, this is what we are engaging ourselves in the coming few weeks. If we get a response from these institutions, then we can take the appropriate steps.”

Mr Kotei also indicated that COPEC intended to test the law to try to get parliament to review the taxes on petroleum.

“We are mindful of the fact that every levy is as a result of an act that is passed by parliament. So, they are laws and if these laws are supposed to be reviewed, somebody must take the initiative, somebody must try to test the law to see… so, we will test the law and see whether we will get some attention,” he said.