Private legal practitioner and a member of the National Democratic Congress (NDC), Godwin Edudzi Tameklo, has accused the government of dishonesty with the decision to withdraw the Value Added Tax (VAT) on electricity consumption.
He says that but for the decision of organized labour to protest, the government would not have withdrawn the controversial tax.
Speaking on the Big Issue on TV3 on Monday, February 5, he said ” H.E John Mahama had given an indication that it does not make sense that Akufo-Addo, the man who led Kumepreko demonstration against the imposition of VAT has not only raised the VAT rate but has gone further to impose VAT on electricity consumption.
“Consistent with the dishonest character of this Bawumia/Akufo-Addo administration immediately organized labour said they were going to protest, government’s assigns and hypemen decided to go on this trajectory by saying that they were going to drop it.
“Organized Labour, I want to put before you today that this government is so dishonest that the only reason why they want to drop this 15 percent ECG VAT is simply because of the election ahead and that should you make the mistake of voting for them to remain in power they will go back for this 15 % VAT. This is a government that said in the midst of Covid 19 that they were giving us free water, free electricity, immediately they got elected in 2020 they imposed Covid levy on us. ”
TV3’s sources say cabinet has decided to withdraw the controversial 15% VAT on electricity subject to further engagement with the International Monetary Fund (IMF).
Organised Labour threatened a nationwide industrial action if the tax was not withdrawn.
Government justified the imposition of the tax as a measure to raise revenue to clear the energy sector debt in a bid to boost the viability of the sector.
However, TV3 understands government may have been forced to backtrack due to the mounting pressure from Labour and other stakeholders. A demonstration has been planned the Trade Union Congress on February 13 against the measure.
And there have been bi-partisan calls for the tax to be dropped. National Democratic Congress candidate John Mahama said it would add to what he said is the hardships of Ghanaians.
National Organizer of the New Patriotic Party (NPP), Henry Nana Boakye is reported to have said that the tax needs to be dropped, because it was among other things making the government unpopular in an election year. He added this was a position of the party.
Government now has to engage the IMF, in areas of expenditure to be restructured within the existing budget to ensure that scrapping the tax will not result in a huge revenue shortfall that will throw the budget off balance.