Parliament passes new fuel tax law to stop smugglers from cheating the system

Ghana's Parliament has enacted a new fuel tax law designed to combat smuggling and prevent businesses from evading taxes on fuel oil. The legislation, passed on Friday, seeks to close a significant loophole that has resulted in substantial revenue losses for the country.

The new law, known as the Energy Sector Levies (Amendment) Bill, 2026, modifies existing legislation by increasing two specific charges on fuel oil: the Energy Sector Shortfall and Debt Repayment Levy (ESSDRI) and the Road Fund Levy. According to the Minister of Finance, Dr. Cassiel Ato Forson, this measure is not intended to introduce new taxes for ordinary Ghanaians or increase fuel prices at the pump.

Graphic Online reports that the bill's primary objective is to bolster revenue collection within the downstream petroleum sector. It aims to address leakages and abuses within the government's fuel subsidy programs, which some beneficiaries have exploited for personal gain. This exploitation undermines the subsidy's purpose of reducing industry production costs and distorts fair competition.

Dr. Forson explained that the government identified a tax evasion scheme where diesel was misclassified as fuel oil. This misclassification created a significant price differential, as diesel attracted taxes of GH¢3.35 per liter while fuel oil attracted GH¢25 per liter. The minister highlighted that this scheme led to potential revenue losses of approximately $25 million between January and June of the current year, based on an analysis of fuel oil sales.

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Mr Speaker, this has resulted in a differential of GH¢3.15.