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The Emission Levy: All you need to know!

Introduction 

The passage of the Emission levy in December 2023 may not have triggered a  fight in Parliament as did the passage of the electronic levy (e-levy). Still, its impact on Ghanaians is no less dreadful.

After a few weeks of reprieve, the Ghana Revenue Authority (GRA) announced the implementation of the Emission Levy Act (Act 1112) on Thursday, Feb. 1, 2024, ostensibly to help in the reduction of carbon dioxide emission and to raise revenue for the country.

Political figures and the public have expressed concerns about introducing the Emissions Levy Act. Experts have argued that amid the ongoing economic crises, this levy will be an added burden on citizens.

What is the Emission Levy?

The Emission Levy is charged on carbon dioxide emissions from specified sectors and internal combustion engine vehicle emissions. The government of Ghana introduced the levy as part of its commitment to encouraging the use of clean energy and combating greenhouse gas emissions. The levy aims to promote the use of eco-friendly technologies and control levels of air pollution in Ghana. Also, it will help mobilise domestic revenue for the Government.  Ghana is one of the few countries in Africa to introduce a form of carbon tax.

According to the Report of the Finance Committee on the Emission Levy Bill, the levy is projected to generate GH¢451,000,000 in revenue in the 2024 fiscal year. The Commissioner-general of the GRA is tasked to collect the levy. This is to be paid into a consolidated fund to support government expenditure. 

How much are users expected to pay?

With the levy’s implementation, the mining, construction, manufacturing, electricity and heating, and oil and Gas sectors must pay GH¢100 per tonne of emissions monthly.

Image source: GRA

Users of internal combustion engines, motorcycles, and tricycles are expected to pay GH¢75 annually. Motor vehicles, buses, and coaches with engine capacities up to 3000 cc will pay GH¢150 annually. In contrast, motor vehicles, buses, and coaches above 3000 cc, with cargo and articulated trucks, will pay GH¢300 annually. 

Vehicle users are required to pay the Emission levy on the ghana.gov platform only. DVLA officials must request proof of payment of the Emission levy before issuing any Road User Certificate.

What were the levels of consultation?

The Finance Committee’s report on the Emission Levy Bill (section 6.3) indicates that the NDC minority members opposed the levy’s imposition, citing its harsh impact on citizens’ living conditions. They declined to recommend the Bill to Parliament for passage.

What are stakeholders saying?

Several industry players have kicked against the imposition of the Emission Levy. The Independent Power Producers, Ghana (IPPG), have signalled that the imposition of the emission levy will cause an electricity price hike. IPPG posits that the ‘GH¢100 per tonne’ emission levy may increase operational costs in electricity generation. The IPPG has called for a review of electricity generation tariffs.

Henry Nana Boakye, the national organiser of the ruling New Patriotic Party, has called on the government to abolish/withdraw the levy immediately.

Seth Terkper, former minister of finance, has lamented that introducing the emission levies on vehicles is a case of double taxation. He believes the emission levy is in the excise duty of old imported vehicles.

The Ghana Union of  Traders Association (GUTA) has admonished the Government for the implementation of the levy. In a press statement, GUTA expressed that implementing the Emission Levy will compound challenges due to a lack of infrastructure for electric vehicles.

Additionally, the Ghana Private Road Transport Union (GPRTU) has hinted at increasing fares after implementing the Emission Levy. 

Conclusion

The emission levy, popularly called the smoke levy, has been added to the taxes imposed on Ghanaians after the COVID-19 pandemic. It is expected to help in the fight against greenhouse gas emissions, but its financial effects on most Ghanaians cannot be ignored.

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One Comment

  1. How is this going to benefit we the citizens. How are they going to implement what they are saying.

    All what this government can offer is imposing tax each and everyday forgetting the hardship in this country.

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