Gov’t robbed GH¢1.8bn in petroleum taxes

Out of the total amount, GH¢148.93m was lost through transfer pricing, GH¢339 million in unreported Energy Sector Levy Act (ESLA) receipts, and GH¢1.4 billion through smuggling and export dumping.
The country also lost GH¢1.4 billion in taxes and regulatory margins from smuggling and export dumping of petroleum products in 2017.
According to a 2017 industry report by the Ghana Chamber of Oil Distributors (CBOD), it marks a 64.71% increase in revenue loss from the National Petroleum Authority’s (NPA) 2016 declared losses of GH¢850m.
This estimate is computed on a smuggled volume of about 856,000 metric tonnes extrapolated from an analysis of historical data adjusted by sub-sector consumption growth.
According to a 2017 Ghana Petroleum downstream industry report, the impact of these occurrences makes legitimate businesses suffer economic losses, which translate into further loss of corporate tax income to the state.
The Chief Executive Officer (CEO) of the Ghana Chamber of Bulk Oil Distributors (CBOD), Senyo Hosi, speaking at the launch of the 2017 industry report, said Ghana remained a net exporter of petroleum, appreciated by a surge in crude production despite being a net importer of refined products, and imports and exports of refined products fell while official local consumption marginally increased.
“National consumption increased from 3.33 metric tonnes in 2016 to 3.46 metric tonnes in 2017.
“This correlates with the total national real Gross Domestic Products (GDP) growth of 3.6%,” he said.
230 Premix trucks diverted
The 2017 downstream petroleum industry report further disclosed that the NPA identified over 230 premix truck diversions in 2017
The identified diversions potentially cost the state about GH¢5.2 million in illegitimate subsidies.
According to the report, excuses given by the identified culprits and government agencies do not seem to conform to known industry rules and legitimate practices.
Government of Ghana’s indebtedness to Bulk BDCs 
The report has it that the year under review commenced with an outstanding validated government debt to BDCs of $140 million and unvalidated claims of $274.5 million.
Tax revenue leakage
Transfer pricing, re-export dumping and smuggling account for the main leakages in petroleum consumption tax revenue.
These occurrences, the report noted, negatively impact the profitability of legitimate businesses and translates into a further loss of corporate income tax to the state.
The illegal trade of export products dumping and shore smuggling continued unabated.
Perpetrators of this trade evade the tax regime and contribute significantly to revenue leakages.
Exports
Refined product exports reduced by 75,996 metric tonnes from 532,803 metric tonnes in 2016 to 456,807 metric tonnes in 2017, marking a 14% fall.
Storage
Ghana’s storage capacity, per the report, reached 2.09 million metric tonnes following the commissioning of Blue Oceans. 
The perpetration of illegal trade is increasingly assuming new heights with more sophistication.
In recent years, intelligence received indicated that the illegal trade, which used to be partly exposed by the presence of unmarked petroleum products in various outlets, is currently being replaced by marked cargo, making it difficult to identify.
This situation, according to the report, will continue to rob government of more tax revenue, distort market prices, and erode the capital legitimate businesses in the country.
Hosi noted that the figures are very alarming and have serious implications if stringent measures are not put in place.
He said the issue borders on criminality, which needs hands from the top political hierarchy.
Hosi said there was the need for Ghana to have a sustainable structure which would ensure a very strong responsibility on the part of people at the helm of affairs.
Consumers, he said, have been paying for prices stabilisation and recovery level for a while, “but the truth of the matter is that has not been used in a structured way to stabilise prices, and not even once”.