Environmental sustainability and transport experts have commended the government's proposal for an annual levy of GHS 100 (USD 8.35) on owners of petrol and diesel vehicles with Internal Combustion Engines (ICE).
“The already developed vehicle emission standards must be promulgated and implemented such that vehicles in a less emitting range pay less,” suggests Sustainable Development Expert,
Mr. Desmond Appiah. He envisions a progressive tax system that encourages vehicle owners to embrace good maintenance practices, ultimately reducing emissions.
The proposed levy is a crucial part of the country's commitment to climate-positive actions and carbon offsetting under the Paris Agreement on Climate Change.
The transport sector is a major contributor to Greenhouse Gas (GHG) emissions, responsible for 48% of total energy emissions and 17% of total national emissions, according to the Energy Transition Policy.
In 2016, mobile combustion emissions in Ghana totalled 7.2 Metric tons of carbon dioxide equivalent (Mt CO2e). The cumulative impact of Ghana's total Carbon Dioxide (CO2) emissions from road transport alone between 2000 and 2016 was 59.9%.
Mr. Appiah emphasizes the importance of aligning the tax system to reduce emissions. However, he notes that the proposed tax may not fully support the government's intention to ban ICE vehicles by 2045, as other countries are phasing them out.
The European Union and many countries have set deadlines for ending sales of new cars with ICE by 2035.
Dr Bob Manteaw, a Senior Research Fellow, supports the proposed eco levy but suggests renaming it to a “climate change tax.” “Everyone's activity contributes to emission from cooking, washing to transportation, so it is just for the levy to be introduced,” he said.
However, Mr Godfred Abulbire, General Secretary of the Ghana Private Road Transport Union (GPRTU), describes the proposed eco levy as premature, citing harsh conditions and excessive taxes.
He emphasizes the need for infrastructure, such as charging points for electric buses, before implementing policies promoting a switch to electric vehicles.
Dr Osman Tahidu Damba, a Senior Lecturer, views the proposed levy as a revenue-generating scheme rather than a genuine effort to incentivize eco-friendly energy sources. “Vehicle owners, especially those in the commercial category, will pass the tax on to their clients, especially traders.
This will increase the cost of goods and services, compounding the already hardship,” he said.
As of 2022, Ghana has over 3.2 million registered vehicles, with nearly all vehicles in Ghana running on diesel fuels (28%), petrol (61%), and Liquified Petroleum Gas (LPG) (11%), according to the country's new electric vehicle policy.