Government through the Ministry of Finance, has said it will hold an extensive dialogue to address the concerns of stakeholders regarding the implementation of the VAT on electricity directive.
This comes on the back of Organised Labour’s opposition to the new tax policy.
The unions believe the 15% VAT on electricity would worsen the plight of already-suffering Ghanaians.
In a statement dated Tuesday, January 30, 2024, the Ministry of Finance said it has “noted the concerns of Organised Labour” on the implementation of VAT on the consumption of electricity by residential customers.
“Extensive dialogue will be held with Organised Labour and other key stakeholders in the coming weeks, to ensure stakeholder buy-in,” the statement added.
In a January 1, 2024 letter, the Ministry wrote to the Electricity Company of Ghana (ECG) and Northern Electricity Distribution Company (NEDCO), as well as the Ghana Revenue Authority (GRA), to begin charging 15% VAT on residential electricity consumers.
Although the ECG Managing Director, Samuel Dubik Mahama, has said that the tax measure has not been implemented yet, collaboration with the stakeholders is still ongoing.
He added that his outfit is still in discussion with the Public Utilities Regulatory Commission (PURC) over the implementation of the VAT.
“It is on record, we have not implemented it, and we are not charging it,” Mr. Dubik Mahama said, adding, “There are some difficulties that have to be checked with the law so I don’t think that it is time for people to panic, it is not panic mode yet.
“All of these things have to be cleared out…so the collection has not started, it is still a conversation going on.”
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Organised Labour has, however, called on the government to rescind its planned implementation of the VAT on electricity. The unions have warned of strike action should the government go ahead and implement the tax measure.
Meanwhile, the Ministry of Finance has appealed to Organised Labour and all stakeholders, including ECG and NEDCO, to exercise restraint to “facilitate a constructive dialogue towards a quick resolution of the impasse.”
The Ministry also noted the progress the country is making in the implementation of the Post-COVID-19 Programme for Economic Growth.
This, according to the Ministry, is evident in posting higher than programmed growth targets, declining inflation, improvements in fiscal and external positions, and a more stable exchange rate, and the declining Monetary Policy Rate.
Read the full statement below:
