- cites loopholes in current structure
There is an urgent need to reconsider and redesign the Emissions Levy 2023 (Act 1112), which took effect on February 1, 2024, if it is to fulfil its intended purpose, Co-chair of the Ghana Extractive Industry Transparency Initiative (GHEITI), Dr. Steve Manteaw, has argued.
To start with, Dr. Manteaw – a civil society activist and energy advocate – raised concerns over insufficient consultation surrounding implementation of the latest carbon tax, highlighting that one major drawback remains the lack of equity structures.
Equity in taxation is deemed essential to ensure a balanced sharing of the burden among those responsible for carbon emissions, but Dr. Manteaw notes that “it [Emissions Levy] is not exactly equitable”.
Another critical point of contention highlighted by Dr. Manteaw is the absence of a clearly-defined purpose for proceeds from the tax. He asserted that the current design lacks an expressly stated intention regarding how the country plans to deploy generated revenue.
This ambiguity raises concerns about transparency and accountability, as the funds will reportedly go to the Consolidated Fund in the absence of a designated purpose fund or vehicle.
The former Public Interest and Accountability Committee (PIAC) chairman warned that the current structure leaves room for the funds to be allocated for purposes unrelated to environmental initiatives.
“The current structure is not too helpful. Government will need to come out clearly on what the intention is, in terms of how they will use the proceeds from this tax,” he stated.
He further noted that limited consultation prior to its implementation could adversely impact the petroleum industry and efforts to mitigate emissions.
He cited, for example, Tullow Oil’s endeavour of a Memorandum of Understanding (MoU) in which it has committed funds to support the Forestry Commission to green the Savannah Belt.
Given the current circumstances, Dr. Manteaw indicated that this could, for instance, conflict with the interest of Tullow Oil to continue with its support as well as paying this latest tax.
“An engagement with the oil and gas industry would have helped to design this particular tax in a way that takes into account efforts being made by industry and other people in mitigating their carbon footprints,” he stated.
Dr. Manteaw spoke on the side-lines of the ‘Citizens’ Version’ launch – PIAC’s report in Accra, and demanded that the tax be withdrawn for further consultations and redesign to take into account all the peculiarities enumerated.
The Emissions Levy follows passing the Emissions Levy Act, 2023 (Act 1112), which imposes a levy on carbon dioxide equivalent emissions on internal combustion engine vehicles and industrial emissions.
Ghana is the third African country to adopt this form of carbon tax, following in the footsteps of South Africa and Mauritius. This move comes at a time when global efforts to combat climate change during the ongoing energy transition are gaining momentum.
The levy aims to reduce greenhouse gas emissions, promote eco-friendly tech and green energy and control pollution levels. Under Act 1112, all vehicle owners must pay the Emissions Levy as per the schedule.
The amount to be paid depends on the type of vehicle and its engine capacity. Motorcycles and tricycles are required to pay GH₵75 annually.
Motor vehicles, buses and coaches with an engine capacity of up to 3,000 cubic centimetres (cc) are required to pay GH₵150 per year. Motor vehicles, buses and coaches with an engine capacity of more than 3,000 cc, cargo trucks and articulated trucks are required to pay GH₵300 per year.
