Ghana’s fuel emissions levy: Another dubious taxation approach by gov’t on citizens

In December of last year, Ghanaians were greeted with a new fiscal imposition from their government: an annual levy tied to the carbon emissions emanating from their petrol or diesel-powered vehicles.

Proponents of this levy, including the government itself, argue that it serves the dual purpose of curbing the nation’s emissions and bolstering governmental revenue.

The levy was recently green-lit by Ghana’s parliament, encompassing fees ranging from 75 Ghanaian cedis for motorised tricycles and motorcycles to 300 cedis for vehicles boasting a capacity of 3,000cc or higher.

While on the global scale, fuel emissions levies are intended to foster the adoption of eco-friendly technology and green energy, the rationale behind this specific tax begs scrutiny.

Firstly, it is imperative to question whether this levy stands any credible chance of significantly curbing emissions.

The resounding answer is ‘no’!

This levy, as it stands, isn’t a progressive solution to carbon emission in Ghana as the absence of credible alternatives will effectively take away the levy’s deterrent effect necessary to dissuade individuals from operating carbon-emitting vehicles.

The fact is, if this levy is meant to incentivise the transition to electric vehicles (EVs), then it is too far-fetched as vehicle buyers in Ghana have no such alternatives.

In the Ghanaian context, where such alternatives remain scarce, this tax merely imposes an additional burden on citizens without offering a tangible pathway toward sustainable transportation.

It’s baffling that the government proceeds with the implementation of this levy despite acknowledging the populace’s lack of choice in the matter.

The move appears particularly egregious in light of the government’s purported commitment to shifting the nation’s focus from taxation to production, a promise now seemingly contradicted by the imposition of multiple taxes, including this emissions levy.

In essence, Ghana’s venture into carbon emissions taxation raises pertinent questions regarding its efficacy, feasibility, and alignment with broader economic objectives.

As it stands, citizens will have to grapple with yet another tax burden but what can the people do but obey?