Executive summary

Ghana's Parliament has enacted the Emissions Levy Act, 2023, Act 1112 (Levy). The Act was passed with respect to the tax measures introduced by the government in the 2024 Budget Statement and Economic Policy (the 2024 Budget). It aims to raise revenue to support the various sector reforms as well as to promote the green economy.

For further information on the 2024 Budget, please refer to EY Global Tax Alert, Ghana issues Budget Statement and Economic Policy for the 2024 Financial Year, dated 27 November 2023.

As no effective date was expressly provided, the Gazette notification date of 29 December 2023 is considered the effective date. Despite this, the Commissioner-General (CG) of the Ghana Revenue Authority (GRA) has issued a public notice requiring taxpayers to comply with effect from 1 February 2024.

Detailed discussion

1. Imposition of the Levy

The Act imposes the Levy on carbon dioxide equivalent emissions from specified sectors and emissions from vehicles at defined rates as provided in the schedule below:

ⁱ GHS is the abbreviation for the Ghanaian Cedi.

2. Tax base

The Levy is calculated as the sum of a person's greenhouse gas emissions (GHG), expressed as the carbon dioxide equivalent¹ of GHG resulting from fuel combustion, industrial processes and fugitive emissions.²

3. Assessment of the Levy payable

1. The CG of GRA, in collaboration with the relevant government agency, assesses the Levy.
2. Taxpayers in the specified sectors are required to file an estimate of the Levy payable for each year of assessment by the end of the first month of the year.
3. An estimate filed with the CG shall be in a form directed by the CG, and the taxpayer may need to furnish any additional information requested by the CG.

4. Submission of return and time of payment of Levy

1. A taxpayer subject to the Levy in the sector specified in the Schedule is required to submit a return to the CG stating the quantity of emissions and levy payable for each month. The return must be submitted no later than the last working day of the month immediately following.
2. The Levy assessed shall be remitted to the CG no later than the last working day of the month immediately following the month to which the assessment relates.
3. If a person is subject to a Levy on motor vehicles specified in the Schedule, the person is required to make the payment to the GRA on or before the renewal of road-use certificate.
4. Persons required to issue a road-use certificate shall request evidence of payment of the Levy before issuance of the road certificate.

5. Authority to collect Levy

The GRA is responsible for collecting the Levy.

6. Payment of levy into a consolidated fund

The CG shall pay all amounts collected under the Act into the Consolidated Fund.

7. Administration of the Levy

Administration of the Levy is governed by the Revenue Administration Act, 2016, Act 915 (as amended).

Implications

Taxpayers in the construction, manufacturing, mining, oil and gas, electricity and heating sectors as provided in the Schedule must submit to the CG of GRA their estimate of the Levy payable for the year by the end of the first month of the year. Additionally, they must submit monthly returns no later than the last working day of the month immediately following. The GRA has yet to provide the required forms for filing.

Affected taxpayers might be required to establish systems to assist with precisely capturing and reporting of GHG levels for the calculation of the tax payable to the GRA.