Increase fuel levy to generate more revenue(May 17, 2010 Page 46)

A MEMBER of the Road Fund Management Board, Professor Mohammed Salifu has called for an increase in the fuel levy as a means of generating more revenue for the Road Fund Board to facilitate its work.
Currently at 6 cents per liter, the fuel levy contribute about 93 per cent of revenue to the Road Fund while collections of tolls and other levies make up the rest of revenue to the fund.
According to Professor Salifu who is also a lecturer at the department of Civil Engineering at the Kwame Nkrumah University of Science and Technology, since 1997 when the Road Fund Act was passed to date, the fuel levy, which contribute the bulk of money to the fund, should have been increased from 6 cents per litre to about 9.5 cents per liter but this has not been done.
The situation, he stressed has was impacting negatively in financing road maintenance in the country and therefore called on the government to bite the bullet and increase the fuel levy.
Professor Salifu made these comment at a forum in Bolgatanga on Financing Road maintenance in Ghana. It was organized by the Road Fund Board under the auspices of the Ministry of Roads and Highways with the aim at sensitizing the public and all stakeholders on the role of the Road Fund in financing of road maintenance in Ghana.
The Road Fund, which derives its revenue from fuel levy, tolls and Vehicle registration, vehicles, road use and International transit fees, is the main source of financing road maintenance in Ghana.
“There is a perception that a lot of money is coming into the fund on the back of the recent increases in the road toll but the truth of the matter is that, the amount accruing to the fund from the road toll is negligible,” he said.
Professor Salifu explained that an increase in the fuel levy will not necessary have to reflect in an increase at the ex-pump prices. He therefore called on government to consider an increase in the fuel levy to sustain the Road Fund.
He also appealed to the Attorney General to initiate steps to help the Road Fund Board retrieve huge sums of monies collected by private road toll operators who have defaulted in payment to the fund.
The National Vice Chairman of the Association of Road Contractors, (ASROC), Mr. Joseph Ebo Hewton, said from February 2010 when the increase in the road toll was announced to date, an amount of GH c 8.3 million has been collected compared to the GH c 2.9 million collected in the whole of 2009. He therefore appealed to road users to see the benefits in the decision and support government.
Mr. Hewton proposed that government should find a way of collecting taxes from vehicles using liquefied gas instead of petroleum. This he explained will shore up the revenue base of the Fund.
He also suggested that the Road Fund Board should amend the Act so that part of the funds should be used for capacity building of both contractors and contract awarding agencies to ensure effective supervision and value for money contracts.
The Upper East Regional Vice Chairman of ASROC, Mr. Hakim Dauda proposed that 25 per cent of vehicles insurance should be paid to the Road Fund Board for the maintenance of roads. This he explained will reduce accidents and minimize claims on insurance companies.
“Tolling could be made optional for motorist to pay periodically in advance so as to avoid the frequent stops. Such advance payments could be incorporated when motorist go for their DVLA road worthiness renewals and facilitate the Road Fund raising bulk sums for their operations,” he said.
The Deputy Minister for Roads and Highways, Dr. Oakley Quaye-Kumah noted that the cost of road construction and its subsequent regular maintenance requires a huge financial outlay which cannot be met entirely from the country’s annual budgetary provision and support received from the development partners.
“It is increasingly recognized that the users of these roads must have to directly or indirectly contribute to the cost of its maintenance,” he said.
The Deputy Upper East Regional Minister, Mrs. Lucy Awuni said the deplorable conditions of most roads in the Upper East Region leave much to be desired, especially during the raining season. The, situation, she said is a big source of worry to the people which calls for redress.
“Any poverty reduction strategy in the region would require the availability of good feeder roads to feed the highways in the movement of goods and services throughout the region,” she said