Why government cannot reduce taxes on petroleum products - Seth Terkper explains

Petrol selling for GH¢10.99

Diesel selling for GH¢12

Taxes make up 40% of fuel prices

Former Finance Minister, Seth Terkper, has noted that government inability to reduce taxes on petroleum products is because monies to be used for payments of subsidies have been collateralized.

According to Seth Terkper, because the Energy Sector Recovery Levy has been collateralized thus the unavailability of funds to aid the government scrapping of some taxes.

He said, “Prof the reason why the government cannot pay subsidy or it cannot reduce taxes is simple. The monies for the subsidy have been collateralized as part of ESLA; because we had built that money, that’s the Price Stabilisation 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?"

“The second element is that why are you not able to reduce those taxes and the rest? Much of the energy sector levies are in ESLA, that is what ESLA is all about which was meant to pay down the road and others, right, so if you remove them, where are you going to get the money to service the ESLA bond?” he said in a JoyNews interview.

Government has been admonished by citizens to scrap taxes on petroleum products as fuel prices keep increasing by the day.

However, taxes make up 40% of fuel prices.