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The reduction in the Energy Sector Levies is expected to see government lose an estimated GH₵308.30 million in revenue.
Out of this amount, GH¢185.28 million and GH¢123.01 million are estimated National Electrification Scheme Levy (NESL) and Public Lighting Levy (PLL), respectively.
These losses will be accounted for under the Power Generation and Infrastructure Support Sub-Account (PGISS).
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In effect, the 60 per cent of monies collected under the NESL and 40 per cent of monies collected under the PLL that is normally paid into the PGISS will no longer be available.
This was contained in the Parliamentary Select Committee on Finance’s report on the Energy Sector Levies Amendment Bill, 2017.
New Bill
The government as part of the 2017 budget statement and economic policy proposed to reduce the NESL from five per cent to two per cent and the PLL from five per cent to three per cent per price of kWh of electricity charged on all categories of consumers.
Pursuant to that commitment, the government introduced a bill to amend the Energy Sector Levies Act, 2015 (ACT 899) as part of measures to reduce the energy sector levies imposed on consumers.
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Energy Sector Levy Act
The Energy Sector Levy Act, which was passed in December 2015, received lots of criticisms as fuel prices at the pumps went up as high as 27 per cent.
The Act was introduced as part of measures of generating revenue to offset the monies that the Volta River Authority owed to banks and some accumulated debts within the country’s energy sector and make the energy companies viable.
The Act placed taxes on some petroleum products and saw the introduction of the energy debt recovery levy and the price stabilisation and recovery levy.
In addition, the road fund and the energy fund were revised upwards.
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Meanwhile, the TOR debt recovery levy, the cross-subsidy levy and the exploration levy were withdrawn.