Draconian ‘Dumsor’ Levy To Drain Ghanaians Of GH¢5.7bn -Minority

If the government proceeds with implementing the GHS1 ‘Dumsor’ levy on every liter of petroleum product purchased, it would generate GHS5.7 billion annually from the people it aims to protect, according to an analysis by Minority Members of Parliament (MPs) from the New Patriotic Party (NPP).

This contrasts sharply with the E-levy introduced by the previous NPP government, which yielded GHS2 billion in revenue annually and was strongly opposed by the National Democratic Congress (NDC) in opposition.

The E-levy was designed to yield approximately GHS2 billion from individuals who opted for momo transactions and when Parliament repealed it, the Majority Leader announced that the government had put back GHS2 billion into the pockets of Ghanaians.

In stark contrast, the ‘Dumsor levy’ is projected to yield GHS5.7 billion from all Ghanaians.

“The government put GHS2 billion back into their pockets and while it was taking its hands out, took GHS5.7 billion out. This is midnight robbery,” noted Kojo Oppong Nkrumah, Ranking Member on the Economy & Development Committee and MP for Ofoase Ayeribi.

At a press conference in Accra on June 9, 2025 jointly addressed by Kojo Oppong Nkrumah and George Kwame Aboagye, Ranking Member on the Energy Committee and MP for Asene/Manso/Akroso, the NPP MPs described the government’s action as hypocritical and draconian, with dire consequences for the economy.

Kojo Oppong Nkrumah explained that the GHS1 ‘Dumsor levy’ is charged at a rate of 8% per transaction, making it one of the highest tax rates introduced in Ghana in a single instance.

“For every one gallon of petroleum product you buy, this government is taking an additional tax of GHS4.50 (8%).

“We recall the NDC’s claim that the then NPP government had done no work for Ghanaians and didn’t deserve to take a 1% levy on mobile money transactions. So, what has the NDC done for Ghanaians to take an 8% tax on every gallon?” the Minority Caucus questioned.

Comparing the implications of the E-levy to the ‘Dumsor levy’, the NPP MPs contended that the E-levy had an effective rate of 1% per transaction, while the ‘Dumsor levy’ is effective at 8% on a transaction.

“The E-levy avoided transactions of less than GHS100. The poor were exempted. The ‘Dumsor levy’ has no minimum threshold. The poor are the most affected because unlike the rich, every cedi counts,” the NPP MPs narrated.

The NPP MPs also highlighted that while the E-levy was payable only by people who opted to do money transfers, the ‘Dumsor levy’ is payable by all Ghanaians, except those who decide to walk every day.

“Even farmers who buy fuel for their tractors will pay, as well as persons who buy fuel for any other purpose. While the E-levy had a limited cascading effect, the ‘Dumsor levy has a total cascading effect as it will affect the prices of transportation and consequently any item that is transported, like food and clothes among many others.”

Parliament on June 3, 2025 approved the Energy Sector Levy (Amendment) Bill, 2025. The bill introduced a GHS1 levy on petroleum products.

The Minister of Finance, Dr. Cassiel Ato Forson, who introduced the bill under a certificate of urgency, said the move was intended to raise additional revenue to address the country’s crippling energy sector debt and ensure stable power supply.

He also told the House that the energy sector was saddled with a US$3.1 billion debt as of March 2025.

That notwithstanding, a minimum of US$3.7 billion was needed to clear the debt, with an additional US$1.2 billion required to procure essential fuel for thermal power generation throughout 2025.

The move by Dr. Cassiel Ato Forson was contrary to his earlier comments made on March 11, 2025 that the government “will not impose taxes to pay for the energy-sector debt”.

The government plans to implement the ‘Dumsor levy’, beginning June 16, 2025 after temporarily putting it on hold, following a backlash from the transport unions, civil society organizations and Oil Marketing Companies (OMC) among many other stakeholders.

Despite this, the NPP MPs argue that the decision taken by the government is unrealistic since the energy sector debt far outweighs what the government has projected to make by the end of 2026.

“Assuming without admitting that this is for the debt payment, how you pay US$3.1 billion (about GHS80 billion) total debt with GHS9 billion which will accrue by December 2026 from this levy? Is that feasible? And if indeed this is for debt payment, why are they after telling us that the debt will be paid by 2026 December, and now turning around to say even the levy is not enough?” the quizzed.

Alternatives

The NPP MPs noted that if the government is mindful of paying off the energy sector debts, it should conclude negotiations of the PPAs that pass on fuel and capacity charges to government by including those in the tariff calculations to eliminate the need for off-book debts caused by the take or pay clauses in the energy sector contracts signed between 2013 and 2016 under the previous NDC government.

It also advised the government to quicken efforts to bring efficiency into the operations of the GRIDCO and ECG to reduce transmission, distribution and other technical loses, as well as pursue the NPP’s strategy to go heavily into renewable energy.

They further noted that they would continue to engage the people of Ghana, civil society organisations, transport unions, OMCs and other stakeholders to let them know the implications of the ‘Dumsor levy’ on the economy.

By Stephen Larbi

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