VAT on electricity: Mahama backs organised labour’s call for government to suspend implementation

January 24, 2024

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Former President, John Dramani Mahama, has backed the Trades Union Congress’ (TUC) call for the government to stop the implementation of the Value Added Tax (VAT) on electricity.

Like the TUC, John Mahama says the additional tax will aggravate the already unbearable economic conditions unleashed on Ghanaians by the New Patriotic Party’s (NPP) poor governance.

In a Facebook post Wednesday, January 24, 2024, the former President promised the TUC that the next NDC government will roll out better economic policies to lessen their burden and that of every Ghanaian.

“Under normal circumstances, the release of $600 million by the International Monetary Fund (IMF) to the government of Ghana should provide relief to the already overburdened and suffering Ghanaian.

“It is, however, evident that Ghanaians will continue to suffer as long as the Akufo-Addo-Bawumia and NPP remain in office. Implementing VAT on electricity consumption will increase tariffs by almost 21% and exacerbate the hardship on Ghanaians. This will affect the prices of goods, services, and transport fares.

“I agree with organised labour that the government must reverse its decision to start collecting VAT on electricity consumption. The National Democratic Congress (NDC) is eager and ready to address Ghana’s economic challenges and provide substantial relief to Ghanaians upon assumption of office in January 2025,” John Mahama assured.

The Trades Union Congress (TUC) issued a seven-day ultimatum to the government, demanding the withdrawal of the imposition of Value Added Tax (VAT) on electricity consumption beyond the lifeline threshold.

The Secretary General of TUC, Dr. Yaw Baah stressed on the detrimental impact of the move on the livelihoods of ordinary Ghanaians, particularly pensioners and those with low incomes.

At a press conference Tuesday, January 23, 2024, Dr. Baah emphasised that the impoverished population in the country cannot afford to bear the additional tax burden.

He called on the government and its agencies to promptly retract the implementation of the proposed tax.

“It’s always the poor people in this country, including pensioners, who bear the brunt. And we should not allow that to continue. Organised Labour, we have come together and our message to the government is very simple, we cannot pay VAT on electricity.

“We will not pay it today or tomorrow. Organised Labour is demanding the immediate withdrawal of the letter, and another directive from the Finance Minister to Ghana Grid Company (GRIDCo), ECG to stop the implementation of the VAT on electricity. We are giving the government, up to January 31, 2024, to withdraw the letter,” Dr Yaw Baah said.