For an oil marketing company (OMC), a small tax classification error can be multiplied across thousands of litres of fuel, hundreds of supplier invoices and numerous customer transactions. The result may not be visible immediately, but it can surface later as unreconciled balances, tax liabilities, penalties, disputed invoices or cash-flow pressure.
This is why VAT, fuel levies and withholding tax require more than routine bookkeeping. OMCs need systems that connect tax rules to fuel volumes, invoices, purchases, payments and the wider price build-up.
With Ghana’s tax framework changing in 2026, getting these areas right is particularly important.
Understanding VAT under the 2026 Framework
The Value Added Tax Act, 2025 (Act 1151), took effect on 1 January 2026. Under the revised system, the standard VAT rate is 15%, while the National Health Insurance Levy (NHIL) and Ghana Education Trust Fund Levy (GETFund) are each 2.5%. For taxable supplies, this produces an effective combined rate of 20%. The COVID-19 Health Recovery Levy was abolished and the former VAT Flat Rate Scheme was removed.
However, OMCs need to pay particular attention to an important distinction: petrol, diesel, LPG, kerosene and residual fuel oil are listed as VAT-exempt supplies under the current framework.
This means an OMC should not simply apply the standard 20% effective rate to every transaction associated with its business.
The key issue is transaction classification
An OMC may have several revenue streams besides the sale of fuel. For example, a station could operate a convenience shop, provide other services or have other taxable activities. Each transaction needs to be assessed according to its actual tax treatment.
The distinction between exempt and taxable supplies also matters for input tax. GRA states that where a VAT-registered importer makes exempt supplies, only VAT incurred in making taxable supplies is generally reclaimable.
For an OMC with mixed activities, this can create a practical accounting issue. Costs such as professional services, repairs, equipment, utilities and other overheads may support both taxable and exempt activities. Where input VAT cannot be directly allocated, apportionment rules may apply.
Practical control: OMCs should maintain separate records for fuel sales, other taxable sales and exempt activities. Their accounting and point-of-sale systems should be capable of producing this information without relying on manual calculations at the end of the month.
Fuel Levies Must Be Reflected in the Price and Accounting Records
Fuel prices in Ghana are affected by several statutory charges. The Energy Sector Levies Act, 2025 (Act 1135), as amended, provides for levies including the Energy Sector Shortfall and Debt Repayment Levy, Road Fund Levy and Energy Fund Levy. The amended schedule currently includes rates such as GHp 195 per litre for petrol and GHp 193 per litre for diesel under the Energy Sector Shortfall and Debt Repayment Levy, alongside other applicable levies.
The additional GH¢1 per litre introduced through the 2025 amendment was implemented from July 2025 after its initial implementation was postponed.
For an OMC, these are not merely figures on a statutory schedule. They affect the price build-up, margins, reconciliations and the amount that should ultimately be accounted for.
Volume reconciliation is critical
Consider an OMC that receives 500,000 litres of diesel during a period. If the applicable levy is calculated on a per-litre basis, the levy exposure is directly connected to the quantity of product subject to the charge.
A discrepancy between depot records, customs records, stock records and sales volumes can therefore create a tax reconciliation problem.
A useful control process should reconcile:
- Opening fuel stock
- Purchases and imports
- Transfers between locations
- Closing stock
- Sales volumes
- Applicable levy rates
- Levies recorded in the accounting system
- Amounts paid to the relevant authorities
The objective is not simply to make the numbers agree. The reconciliation should explain differences such as stock losses, timing differences, adjustments and transfers.
The 2026 amendment adds another compliance consideration
The Energy Sector Levies (Amendment) Act, 2026 received presidential assent in August 2026. The Presidency stated that the amendment addresses the previous treatment of fuel oil used by factories and maritime operators, requiring affected operators to pay the taxes upfront and provide verifiable evidence for reimbursement.
For businesses dealing with fuel oil, this makes documentation particularly important. An OMC supplying affected customers should understand how the applicable exemption or reimbursement process operates and retain the supporting records needed to substantiate the transaction.
Withholding Tax: The Payment Process Matters
Withholding tax (WHT) is particularly relevant because OMCs deal with a wide network of suppliers and service providers.
GRA’s current guidance provides different rates depending on the nature of the payment. For resident persons, examples include 3% on qualifying supplies of goods above GH¢2,000, 5% on qualifying works above GH¢2,000, and 7.5% on qualifying supplies of services by an entity above GH¢2,000 per annum. Payments to petroleum subcontractors are also listed at 7.5% for resident persons.
The important point is that the rate cannot be selected simply because a supplier has sent an invoice. The OMC needs to determine what is actually being paid for, who the payee is, whether the payment falls within the withholding rules and whether an exemption applies.
A simple example
Suppose an OMC engages a company to provide a qualifying service and the applicable WHT rate is 7.5%. The accounts payable team should not treat the full invoice amount as the amount payable to the supplier.
The withholding amount needs to be identified, deducted and accounted for appropriately. The supplier should receive the corresponding withholding certificate, while the OMC must account for the tax to GRA.
GRA states that withholding agents must file and pay tax withheld within 15 days after the end of the month in which the withholding occurred. Failure to withhold can leave the withholding agent liable for the tax.
This makes WHT a payment-control issue as much as a tax issue.
A purchase invoice can be correctly entered into the accounting system and still result in non-compliance if the payment process fails to trigger the correct withholding.
Do Not Confuse WHT With Withholding VAT
This distinction is important for OMC finance teams.
Income tax withholding and VAT withholding are separate mechanisms.
GRA currently provides that appointed VAT withholding agents withhold 7% of the taxable value of standard-rated local supplies and issue a Withholding VAT Credit Certificate. The supplier still has to account for the relevant VAT, NHIL and GETFund obligations through its VAT return.
Therefore, when an OMC receives or makes a payment involving a VAT withholding agent, the accounting team needs to establish whether the transaction involves:
- Income tax withholding;
- VAT withholding;
- Both; or
- Neither.
Treating the two as interchangeable can result in incorrect supplier payments and tax returns.
What OMCs Should Have in Place
Tax compliance becomes easier when controls are built into normal operations rather than performed only when a return is due.
OMCs should consider maintaining:
1. A tax treatment matrix
Each major transaction type should have a documented treatment covering VAT, NHIL, GETFund, fuel levies and WHT where applicable.
2. Automated transaction controls
The accounting or ERP system should apply the appropriate tax treatment based on transaction type, supplier category and product.
3. Monthly reconciliations
Fuel volumes, purchases, sales, inventory, levy calculations, VAT records and tax payments should be reconciled regularly.
4. Supplier master-data controls
Supplier records should contain the information required to determine the appropriate WHT treatment. Changes to supplier classification should also be reviewed rather than made casually.
5. Complete supporting documentation
Invoices, contracts, customs documents, stock records, levy calculations, withholding certificates and payment evidence should be retained and linked to the underlying transactions.
6. Monitoring of legislative changes
The 2026 tax changes demonstrate why an OMC cannot rely indefinitely on last year’s tax configuration. Parliament has already enacted further changes affecting VAT and energy-sector levies in 2026, making it important for finance and tax teams to monitor commencement dates and implementation guidance.
Conclusion
For oil marketing companies, tax compliance is closely connected to operational data. Fuel volumes affect levies, transaction classifications affect VAT treatment, and supplier payments can trigger withholding obligations.
The practical priority is therefore to make the tax treatment of each transaction clear before it reaches the ledger. When fuel movements, invoices, supplier payments and tax returns are properly connected, the company is better positioned to identify discrepancies early, support its tax positions with evidence and reduce avoidable compliance exposure.
For OMCs operating in Ghana, getting VAT, fuel levies and withholding tax right is not only about filing returns on time. It is about ensuring that the underlying transactions, systems and records tell the same story.