The war against fuel smuggling has helped Ghana save nearly GH¢1 billion as disclosed by a latest report on the activities in the downstream petroleum subsector.
The report indicate that GH¢952 million was saved through the blocking of illicit sale of petroleum products throughout the country in 2018.
This marks an improvement in the sub-sector’s performance as compared to losses made in the last three years – 2015 to 2017- through unaccounted stock and evasion of taxes.
Huge savings has occurred as a result of interventions by the National Petroleum Authority (NPA) to curb the illicit trade of petroleum products and ensure that fuel is sold through official channels, the annual report of the Chamber of Bulk Oil Distributors (CBOD) has disclosed.
“In 2018, no loss related to unaccounted stockswas estimated. It was revealed that 574.25 million litres more than the official stocks saleable in the country were sold. This indicates that smuggled stocks in the monitored depots must have been trapped as a result of the NPA’s regulatory interventions to curb the illicit trade of petroleum products and forced to be sold through official channels”.
“This saved the nation GH¢797.49 million in taxes and GH¢154.93 million in regulatory margins yielding a total savings of GH¢952.42 million,” the report stated.
According to the latest report, the NPA, aided by elements of the central government made progress towards tackling the challenges of smuggling and tax evasion.
“This was a welcome move in the industry and yielded tangible results even though there remains a lot to be done to bring sustainable finality to the illegal trade,” the report stated.
The report further explained that interventions by the NPA minimised tax evasion through official channels of distributions. Hence, official volumes of the most tax-evaded products, AGO regular and PMS, have shot up by 17 per cent and 19 per cent respectively.
A reconciliation of official national stocks movement data revealed that 54.36mn litres, 168.48mn litres and 794.75 million litres could not be accounted for in 2015, 2016 and 2017 respectively.
Also, the associated petroleum tax revenue evasion to these stocks stood at GH¢1.4 billion while the associated evaded regulatory margins amounted to GH¢238.96 million.
For the period 2015 to 2018, total taxes evaded based on official unaccounted stocks stood at GH¢1.3 billion while total under-reported taxes based on official accounted sale volume after adjustments for exemptions was GH¢1.2 billion.
“This implies that the country lost a total of GH¢2.6 billion in taxes for the period. Combined with the evaded regulatory margin of GH¢231.53 million, a total GH¢2.790.59 million has been lost to the nation in taxes and regulatory margins for the period 2015 to 2018,” it stated.
Although the petroleum tax revenue increased on the back of reduced illegal trades which reflected in an increase in official volumes, there was under-reporting of taxes on official sales by GH¢433.75 million in 2018. This was revealed after adjusting for tax exemptions and waivers.