NPA imposes tax on petroleum products meant for export

July 12, 2017
Source: Norvan Acquah - Hayford/thebftonline.com/Ghana
NPA imposes tax on petroleum products meant for export

The taxes that apply to petroleum products meant for the local market will now apply to products meant for neighbouring landlocked countries, and the exporters will be reimbursed when they prove that the products were duly exported, the National Petroleum Authority (NPA) has.

The move, the NPA said, is part of measures aimed at finding a lasting solution to the situation where products meant for export find their way back on to the Ghanaian market and undercut genuine operators.

A lot of money is made when products meant for export find their way back on to the Ghanaian market, which is because products meant for Burkina Faso and Mali, did not attract levies, taxes and margins, which constitute up to 51% of the pump price of products sold locally.

By diverting such products back onto the Ghanaian market, therefore, illegal operators are able to sell at lower prices and undercut genuine operators.

Energy Minister, Boakye Agyarko said recently that: "The practice has created an artificial increase in export volumes. Export volumes for Diesel, especially, grew by an astronomical 1829% from just above 10million litres to over 196million litres, while petrol grew by 102%."

"These volumes do not match the volumes recorded by the Malian and Burkinabe regulators as official imports from Ghana, confirming that most of these products do not reach the declared destinations."

The government, at the beginning of the year, said it had uncovered a fuel smuggling syndicate at the Tema port, whose activities cost the nation in excess of Ghc 850,000.

The Association of Oil Marketing Companies (OMC) have described the act as unfair competition, as it makes its members lose volumes.

The association contends that if urgent action is not taking against the smugglers, some 4000 jobs could be lost in the coming weeks.

The Chief Executive Officer of the National Petroleum Authority, Alhassan Tampuli, told the B&FT government is committed to ending the illegal activity, and that the tax is only one of several measures being put in place.

"Going forward, all petroleum products that come through our boarders, including those meant for export to other countries, are to be taxed. Some importers bring in these products and indicate that they are meant for export to the landlocked countries like Togo, Burkina, Mali, among others, but they end up selling the product in Ghana. So, the truck loads for Mali but just the following day the truck comes back to the loading bay. You will ask how that is possible. This means something is wrong or missing."

"What we have decided to do now is to impose taxes on fuel which is to be exported to any landlock country. When you pay the tax here then, when the goods have been delivered to either of the countries, providing us prove with the discharge certificate and prove that you have paid the expected taxes in the country of discharge, then the tax you paid here is refunded to you. Genuine exporters or businessmen and women will not have a problem with these arrangements," he added.