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Ghana Plans Talks on 15% VAT on Electricity

Ghana Plans Talks on 15% VAT on Electricity (News Central TV)

The government intends to have a “serious discussion” with labour unions and other important parties in the upcoming weeks to secure support for imposing a fifteen percent value-added tax (VAT) on electricity.

This came after stakeholder groups, such as labour unions, protested the policy that aims to tax residential customers’ electricity consumption.

In a statement, the Ministry of Finance urged organised labour and all other parties involved, such as ECG and NEDCO, to use moderation in order to promote a productive conversation aimed at a speedy resolution of the impasse.

The statement noted that the government was committed to working with all stakeholders to sustain economic gains and engender macroeconomic stability and inclusive growth in the country.

“We note the progress the country is making in the implementation of the Post-Covid-19 Programme for Economic Growth (PC-PEG), including posting higher than programmed growth targets, declining inflation, improvement in fiscal and external positions, a more stable exchange rate, and the declining monetary policy rate,” the statement said.

The Ministry of Finance, in a letter dated December 12, 2023, instructed the Electricity Company of Ghana (ECG) and the Northern Electricity Distribution Company (NEDCO) to apply the VAT to residential customers exceeding the maximum consumption level for lifeline units in January this year.

In its response, organised labour, through the Trade Union Congress on January 23, gave the government a seven-day ultimatum to withdraw the policy.

It critcised the timing of the policy, which it said would worsen the economic conditions of Ghanaians.

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