The Association of Oil Marketing Companies in the Republic of Ghana is seeking a review of the government’s tax policy, which requires OMCs to pay in full taxes on fuel products they have lifted but yet to be sold.

According to the Association, the nature of the policy is more or less pre-financing government, which in their estimation, is not the best.

Speaking to energynewsafrica.com in an exclusive interview, Industry Coordinator and Chief Executive Officer for the Association of Oil Marketing Companies, Mr Kwaku Agyemang-Duah described the current tax policy as inimical to the operations of the OMCs.

Mr. Kwaku Agyemang-Duah, CEO of Association of Oil Marketing Companies, Republic of Ghana

He mentioned that the policy, coupled with the impact outbreak of covid-19, has heavily affected a good number of OMCs.

He revealed that about 35 OMCs are currently not lifting fuel because of financial challenges triggered by the taxes and cost of operations.

“The main thing that we have in the industry still persists. That is, the issue of paying taxes on goods we have not sold. We pay taxes as we lift the product. So, assuming you lift 100,000 litres, you have to pay taxes whether you have sold it or not. So, assuming I sell 40,000 litres, its immaterial as I have to pay taxes on all. Moreover, the difficulty is how I get money to pay. It means you have to go to the bank and borrow to pay. Therefore, it is more or less like pre-financing the government.

Ghana: COVID-19: Petroleum Commission Estimates Over 450 Job Losses

“So what we are doing is that we are discussing with GRA and Ministry of Finance to see how we deal with the tax issue. We are not saying reduce the taxes, but we believe that if, for instance, it is pay as you sell, it will help all of us. If the money is not there and because you have the law on your side, I must pay at all cost then that is very bad,” he said.

Mr Agyemang-Duah, however, lauded the passage of the Insolvency Act, which he said would give businesses that are struggling or liquidated companies the opportunity to reorganise and bounce back.

“The Insolvency Act will help people in the situation of bankruptcy to really avail themselves and come back again. It is a good opportunity for us, but be it as it may, I think it is not operational yet so you cannot avail yourself for that opportunity.”

Source:www.energynewsafrica.com

LEAVE A REPLY

Please enter your comment!
Please enter your name here