- As part of a package deal to bring relief to its citizens amid hikes in crude oil and food prices, the government of Ghana is set to reduce tax on petroleum products.
In his nationwide address on Thursday, President John Agyekum Kufuor announced the removal of debt recovery levy and excise duty on premix fuel as well as import duties on staple food including rice, wheat, yellow corn and vegetable oil.
The Kufuor government also decided to increase its support for the production cost of electricity, subsidize the cost of fertilizer and ensure effective distribution to farmers.
Ghanaian leader had directed his Finance Minister to urgently seek parliamentary approval for the reduction of transport fares and food prices.
Mr Kufuor however warned that it would be criminal for anyone to attempt to re-export items declared tax-exempt purposely for the benefit of the local market.
The measures come at a time when Ghana's crude oil import bill has been mounting at record levels in recent years. From US $500 million in 2005, it rose to US $2.1 billion at the end of 2007 and now heading towards US $2.5 billion.
Ghana’s current budget was prepared on an estimated crude oil price of US $85 per barrel but within the first quarter of the year, it had overshot beyond US $125 dollars per barrel. Experts are projecting an all time record high of US $200 per barrel.
President Kufuor had admitted that his latest decision will obviously leave negative marks on the country's development projects. He said the trend will throw the budget out of control although it involves cutting down some of the government's development projects.
But Mr Kufuor allayed fears that the measure will "cut back on policies designed to protect the vulnerable in the society."
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