Home » Ghana’s Vehicle Emissions Tax Criticized for Ineffectiveness

Ghana’s Vehicle Emissions Tax Criticized for Ineffectiveness

Experts Doubt Tax Will Reduce Carbon Emissions and Warn of Financial Burden

by Ikeoluwa Juliana Ogungbangbe
Ghana vehicle emissions tax

The introduction of a new vehicle emissions tax in Ghana has come under scrutiny, with experts like Benjamin Boakye, the Executive Director of the Africa Centre for Energy Policy (ACEP), suggesting that it may not effectively reduce carbon emissions. Boakye argues that the implementation of the Emissions Levy Act, 2023 (Act 1112), while aiming to address environmental concerns, may fall short of its intended goals and could even lead to unintended consequences.

Boakye contends that the new emissions levy is unlikely to deter individuals from driving or reduce carbon emissions significantly. He argues that people will continue to drive as it is a necessity for transportation, and the tax is unlikely to discourage them. Instead, it may simply result in additional financial burdens on motorists, potentially causing them to seek ways to avoid or evade paying the tax.

Moreover, Boakye raises concerns about the potential loss of revenue for the government due to the implementation of this tax. He suggests that the tax may not generate the expected income, especially if people find ways to circumvent it. This could create a situation where the government collects fewer funds while still grappling with the environmental challenges posed by carbon emissions.

Boakye believes that the government’s approach to tackling carbon emissions lacks sensitivity to the economic realities faced by Ghanaians. He suggests that rather than imposing a new vehicle tax, the government should explore alternative ways to raise tax revenue. He argues that taxing specific activities or sectors could be a more effective and equitable approach.

Furthermore, Boakye points out that drivers in Ghana already face taxation when purchasing fuel for their vehicles. In his view, piling on additional taxes related to transportation, such as the new emissions levy, demonstrates a lack of consideration for the financial burden placed on individuals who rely on driving as their primary mode of transportation.

The implementation of the Emissions Levy Act, 2023, which imposes a tax on carbon dioxide equivalent emissions from internal combustion engine vehicles, is part of the Ghanaian government’s commitment to addressing greenhouse gas emissions and environmental concerns.

While the government’s intentions to combat carbon emissions and promote environmental sustainability are commendable, Boakye’s concerns highlight the need for a comprehensive and balanced approach. Striking a balance between environmental protection and the economic well-being of citizens is crucial in any policy aimed at reducing carbon emissions.

Ultimately, the effectiveness of the emissions levy and its impact on carbon emissions in Ghana will become clearer as the policy is put into practice and its consequences are monitored over time. The government may need to consider feedback from experts like Benjamin Boakye and stakeholders in refining its environmental taxation policies to achieve both its environmental and fiscal objectives.

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