Ghana has become the third African country to introduce a carbon tax known as the “Emission Levy,” following in the footsteps of South Africa and Mauritius. Starting February 1st, 2024, the Ghana Revenue Authority (GRA) has commenced the implementation of the Emissions Levy Act of 2023.

This Act imposes a levy on carbon dioxide equivalent emissions from internal combustion engine vehicles.

A carbon tax is a form of environmental taxation aimed at reducing the emission of greenhouse gases, particularly carbon dioxide (CO2), into the atmosphere.

It is designed to internalize the external costs of carbon emissions, accounting for the societal and environmental costs associated with climate change that are not reflected in the market price of goods and services.

According to the government, the purpose of the tax is to promote the use of eco-friendly technologies and green energy, improve environmental management, and control general levels of air and water pollution locally by imposing a levy on carbon dioxide equivalent emissions from specified sectors and emissions from internal combustion engine vehicles in the country.

However, environmental experts in the West African nation are casting doubt on the effectiveness of the carbon tax. Stephen Dakyi, Esq., the founder of wiki Green Initiatives, expressed concerns about the lack of transparency regarding the utilization of the levy funds.

“In principle, we are not against any levy directly addressing environmental issues. The problem is that the emissions levy in its current form appears to be focused on revenue generation. It is clear about the levy for different vehicles, but it is not clear or transparent about where the monies will go and how they will be used to address environmental conservation and climate change,” she stated. Activists say the reasons for the introduction of the tax.

By: Daniel Sarkodie Banful