Parliament passes bills to impose royalties | Politics

The Parliament adopted the Energy Sector Levies Bill (Amendment), 2021 and the Financial Sector Revival Levies Bill, 2021 to impose special levies on certain parts of the economy. the economy.

While the energy tax will tackle challenges in the energy sector, as well as sanitation and pollution issues, the financial sector stimulus tax was introduced to raise funds to recover the cost of cleaning up the banking sector.

The levy for the recovery of the financial sector imposes a levy of 5% on the pre-tax profit of banks.

The levy is due in respect of profit before tax for the tax years 2021, 2022, 2023 and 2024.

It is expected to help the government raise around GH ¢ 219 million in 2021.

The Energy Tax Bill, on the other hand, will amend the Energy Sector Tax Act 2015 (Act 899) to provide for an energy sector recovery tax and an energy sector recovery tax. sanitation and pollution tax.

These were included in two separate reports that were presented to Parliament last Thursday by the chairman of the Parliament’s finance committee, Mr. Kwaku Kwarteng.

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According to reports, the proceeds of the energy sector stimulus tax will be used to close the funding gap caused by the inability of the Ghana Electricity Company (ECG) to pay for light crude oil and diesel. supplied through banks to generate electricity under the terms of power purchase agreements (PPAs) with independent power producers.

In addition, the sanitation and pollution tax is imposed on certain petroleum products in order to provide funds to support programs and projects aimed at improving air quality and to provide sustainable funding for collection, treatment and disposal of liquid and solid waste.

The proceeds of the sanitation and pollution tax will be used to improve air quality in urban areas, fight pollution and design, build, re-engineer and maintain waste disposal and treatment plants, including landfills and medical and other specialized waste treatment facilities.

The proceeds of the tax are also to be used for the construction of sanitation facilities in order to accelerate the elimination of open defecation and to support the fumigation of public spaces, schools, health centers and steps.

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According to the committee report on the Energy Levies (Amendment) Bill 2021, air pollution and poor sanitation were the main contributors to noncommunicable diseases such as heart attacks, stroke and lung cancer, which claimed many lives every year.

He said that the sanitation and pollution tax would, therefore, be applied in accordance with the government’s goal of making Ghana one of the cleanest countries in Africa, and contributing to the achievement of the goals. sustainable development three and six.

“This involves ensuring, among other things, sustainable management of sanitation for all, protecting lives, livelihoods, the most vulnerable populations and improving air quality,” said he declared.

The report estimated that the total revenue from royalties would be GH ¢ 666.2 million and GH ¢ 311.7 million for the energy sector recovery tax and the sanitation and pollution tax, respectively, in 2021.

Financial sector

For the tax for the recovery of the financial sector, the report indicates that the government initiated reforms in the banking sector from August 2017 to December 2018, with the aim of cleaning up the financial sector, strengthening resilience and promoting security, soundness and stability of the financial system to support Ghana’s economic growth agenda.

“This was informed by the Bank of Ghana’s asset quality review exercise carried out in 2015 and 2016 on universal banks, which found that some local banks had problems in terms of insufficient capital, levels high levels of non-performing loans and poor corporate governance. system, ”he says.