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introduction
The first part examined nine VAT measures qualified as tax success and concluded by highlighting several weaknesses that hinder their effectiveness: distortion of tax structure, increase in tax burden and failure to achieve ambitious revenue targets. for almost three (3) years. Part II deals with the Law on Energy Levies 2015 (Law 899) – the pre-eminent "nuisance" tax; temporary levies and special excise measures for oil.
Energy Sector Perception Act (ESLA)
Parliament pbaded the ESLA Act to address budgetary issues related to: a) the sharp drop in prices of crude oil and other commodities from the end of 2014 to 2016; (b) impact on global demand and recession in many sub-Saharan African countries – to which Ghana has escaped; but (c) blocked its recovery from an interruption of Nigeria's gas supply for more than two (2) years; (d) arrears of subsidy due to delays in the adjustment of oil and electricity prices due to soaring crude oil prices for fuels and thermal power plants; (e) consecutive energy crisis (called "dumsor"); and (f) unpaid road arrears that have almost paralyzed the economy. Table 1 shows the ESLA samples on various products as it pbades.
Table 1: Levies and pricing of the energy sector
A weak link existed between the non-repayable loans and non-performing loans that state-owned enterprises (state-owned enterprises) owed to banks and suppliers and weighed heavily on them. Given the popularity of its "damaging" tax position during an election year, the government, in opposition at the time, even put pressure on its MPs for that purpose. they boycott the vote on ESLA.
Measure 10: ESLA – Retention of Samples
First, the continued existence of ESLA embodies a major reversal of government policy. Second, given the lack of revenue targets since 2017, Table 2 shows that, in addition to its original objectives, HALS flows are now a major source of fiscal stability and even election promises are held through the "capping" policy.
Table 2: Projections of ESLA Revenue Flows (2016-2022)
Table 3 shows the projections, actual and localized in the different ESLA funds, for the years in which ESLA was fully operational (2016 to 2018). It shows that the deviations from the program, particularly in terms of housing, have worsened since the entry into force of the "ceiling" policy.
Table 3: ESLA Projections, Collections and Actual Flows (2016-2018)
Measure 11: Slight increase in the burden of sampling ESLA
The ESLA flows have become buoyant because the levies are ad valorem and respond steadily to higher crude oil prices, which form the basis of the tax. Therefore, given the liberalization of the price regime and the rise in crude prices from an average of less than USD 40 (2015-2016) to USD 60 plus (from 2017 to date), the tax would have had to be reduced and not increased. It is clear, therefore, that price and revenue increases impose a heavier tax burden on consumers.
Measure 12: Subtle extension of ESLA levies through bonds
After reneging on its promise of elimination, the government surreptitiously and effectively extended the 3 to 5 year old ESLA samples to 7 to 10 years through its 7 years (August 2017) (2.41 billion Ghc) and 10 years (CHF 2.38 billion) of ESLA bonds. These bonds also refinanced the 2016 EHSA's 2016 cash flow and debt restructuring facility by the previous government. The 2019 budget also provides for a "re-tap" on the 10-year bond of 2017 in January and August 2018, with returns of 615 million Ghc and 264 million Ghc, respectively.
As noted earlier, the ESLA was a temporary tax that, based on a joint badessment of three to four month revenue streams, was used by the Ministry of Finance and the Ghana Bankers Association (GBA). for the next 250 years. -Injection and restructuring of 2.2 billion ghd of the debt due by VRA to 12 national banks. A second draft unused list of conditions, worth US $ 600 million, was also based on a five-year term. Given the credibility of the market, the levy is automatically extended to 7 and 10 years under the bond replacement mechanism.
Measure 13: apparent shift in the use of ESLA to support life-saving costs
The Annual Report on the Management of Energy Sector Fees and Accounts (2016) highlights the objectives of the HALS as follows:
"The law (i) consolidates existing charges in the energy sector and provides a framework to correct imbalances in the collection, distribution and use of royalties; (iii) ensure the financial viability of state enterprises in the energy sector; (iv) facilitate investment in the sector; and (v) mitigate the market, credit and liquidity risks of the SOES in the energy sector and their counterparty banks "(para 2, p.6, emphasis added).
The 2017 report highlights the importance of using ESLA to leverage markets in order to solve "the over-indebtedness that has increased exposure … to credit and liquidity risk and, as a result, has had a significant impact on the balance sheets of creditor counterparties ". Curiously, the ESLA 2018 report (p.1) does not mention the bailout of the banking sector (p.1 and p12).
"ESLA has been adopted … primarily to address the heavy debt burden and operational challenges faced by state-owned energy companies, support energy production and sustainability." of supply, subsidize the premix and stabilize oil prices, support the maintenance of roads and finance the project. activities of the Energy Commission ".
This omission may not be accidental, given the attempt to exclude the ESLA-related obligation (and underlying bail-out costs) from the public debt and the budget deficit, through information to be provided in the budget, mainly in the annexes and footnotes.
Measure 14: Reduction of certain ESLA fees
The 2017 budget reduced by two (2) ESLA samples: the national levy relating to the national electrification program from 5% to 2%; and the public lighting tax of 5% to 3%. These are popular but not financially progressive as they precede ESLA and form the foundation of the popular standalone electrification program (SHEP) and MMDA public lighting badistance.
Measure 15: Misappropriation of HALS Funds for Other Tax Uses
The ESLA reports note its unauthorized use to settle commitments outside the energy and road sector under the law. Exceptional payments include pension arrears in 2016, which, compared with "capped" funds intended for integration, may not be legal, but they emphasize the importance of using ESLA to fill a extended budget mandate impossible to meet by the fall in existing revenues.
Temporary taxes
Parliament pbaded the National Tax Stabilization Tax (NFSL) and the Special Import Tax (SIL) in 2013 as temporary taxes, among other measures, to reduce the huge backlog of subsidies and subsidies. in salary (Single Spine Pay Policy). The use of temporary taxes to make corrections to austerity programs has two previous under the administration of Presidents Rawlings and Kuffuor.
Measure 16: National tax deduction for fiscal stabilization (NFSL)
Recent amendments to the Income Tax Act (2015) extended the NSFL by 5% on pre-tax profits from 2013 to 2019. The amendments relate to collection, enforcement, repayment and the penalties of the NFSL.
Measure 16: Special levy on importation (SIL)
The GRA applies a SIL at any point of entry to 2% of the cost, insurance and freight (CIF) of goods imported into the country, this rate being reduced by 3% and the clause of 39, extinguishing 3 years at 2%. Originally, NFSL and SIL were to disappear in 2017, but because of "the government's commitment to continue to carry out the necessary social programs, it was decided to expand the two samples to 2019 ".
First, the decision to maintain both taxes after crude oil and gas prices and production had improved pressure points on spending. Second, the decision to change the goal and to integrate the SIL as a budget source of social intervention represents a significant shift from the use of temporary taxes to strengthen other measures in periodic austerity programs.
Excise on oil (measure 17):
In 2017, the government reduced the special excise on oil from 17.5% to 15%, then to 13% – when crude oil prices started to rise from their low level of 40 US dollars at the end of 2014 to 2017. The multiple objectives of this measure are:
the policy of the replacement tax, the goal was to change the excise system on oil from particular to ad valorem – which has since returned to specific; adoption of a counter-cyclical price policy to support the creation of oil reserves to improve economic management.
fill the fiscal gap and protect the economy from the recessionary wave in several sub-Saharan African (SSA) states, due to falling commodity prices; and make the excise on oil more equitable, compared to other products such as tobacco (rate), alcohol (rate) and non-alcoholic beverages (rate).
The change in the 17.5% excise tax rate does not make the tax new and, furthermore, the rate reduction in 2017 seems premature. The economy was not fully restored and the new administration had to deliver many ambitious promises. Third, as a punitive tax, the excise on oil serves to protect the environment and so it is strange to replace this generalized tax with an increase in inspection fees (of use ) of the DVLA.
Conclusion
In addition to the rationalization of excise taxes on oil, the taxes covered by Part 2 are mainly used as temporary levies to resolve cyclical crises (SIL and NFSL) in the context of austerity programs or challenges. Specifically (ESLA). In this context, it is difficult to defend their maintenance, expansion and expansion, given the recovery in oil and other commodity prices and the almost tripling of oil production from two additional oil fields. The only explanation for measures 10 to 17 is their fortuitous use to generate revenues to cope with overly ambitious spending programs that widen the growing gaps in fiscal deficit, borrowing and public debt.
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