By VALENTIA TETTEH
Parliament has passed the Energy Sector Levies (Amendment) Bill, 2026, paving the way for changes to the administration of fuel-related levies aimed at reducing revenue leakages and strengthening financing for the country’s energy sector.
The legislation amends the Energy Sector Levies Act, 2026 (Act 1135) by increasing the rate of the Energy Sector Shortfall and Debt Repayment Levy on fuel oil as well as the Road Fund Levy on fuel oil, while introducing changes to the subsidy reimbursement framework.
Defending the Bill on the floor of Parliament on Friday, July 31, 2026, Finance Minister Dr. Cassiel Ato Forson rejected claims that the amendment introduces a new tax, insisting that the government is merely reforming the way subsidies are administered to eliminate abuse within the system.
According to him, the amendment replaces the existing upfront subsidy arrangement with an ex-post subsidy model, under which eligible beneficiaries will first pay the applicable levy before applying for reimbursement.
“Let me take my time to explain the difference between an ex-ante subsidy and an ex-post subsidy. A subsidy that is paid after the event, after the costs have been incurred, is what we call an ex-post subsidy. It is the opposite of an ex-ante subsidy, where payment is made before the event,” Dr. Ato Forson explained.
The Finance Minister said the policy change is intended to close loopholes that have resulted in significant revenue losses over the years.
“We have observed some significant leakage. One would have thought that a party positioning itself as a government-in-waiting would support efforts to stop revenue leakages. Rather, we are hearing arguments that the leakages should continue, with claims that this is a new tax. Mr. Speaker, this is not a new tax,” he stated.
Dr. Ato Forson argued that the levy itself already exists and that the amendment only changes the timing of subsidy payments to improve accountability.
“The tax already exists. However, the subsidy is what we have changed. Instead of getting it upfront, you will now pay for the subsidy, justify it, and get your refund. That’s all. That is modern tax policy,” he said.
The Finance Minister drew parallels with government’s reforms to the Free Senior High School programme, saying policy reviews should not be misconstrued as policy reversals.
“Once upon a time, reviewing Free SHS was interpreted as cancelling Free SHS. Yet today we have strengthened the programme by providing a dedicated source of funding. This is exactly what we are doing here; we are fixing leakages and abuse within the subsidy regime,” he told Parliament.
He further noted that tax policies must evolve to respond to changing economic realities and attempts by individuals and businesses to exploit weaknesses within existing systems.
“Tax policy is one of the most dynamic laws in any country because it reflects the behaviour of society. While governments introduce tax measures, some people also find ways around them. It is therefore the responsibility of the government to remain dynamic and proactive. We are only being dynamic in addressing these challenges,” Dr. Ato Forson added.
Government maintains that the amendment will improve transparency in the administration of fuel subsidies, enhance revenue mobilisation and support efforts to reduce debt within the energy sector while ensuring that only eligible beneficiaries receive subsidy reimbursements.
