Business & FinancePolitics

VAT On Electricity Will Increase Tariffs By 20%- Mahama

The flagbearer of the National Democratic Congress (NDC), John Dramani Mahama, has predicted about 21% increase in tariffs with the government’s announced tax on electricity.

In a statement, the former president threw his weight behind organized labour in their opposition to the Value-Added Tax, recognizing that it would overburden Ghanaians.

According to him, the imposition of VAT on electricity would “increase tariffs by nearly 21% and have a ripple effect on the prices of goods, services, and transport fares” and thus urged the government to reverse its decision to provide relief to Ghanaians.

The Finance Minister, Ken Ofori Atta, in a letter dated December 12, 2023, directed the Electricity Company of Ghana (ECG) and the Northern Electricity Distribution Company (NEDCO) to liaise with the Ghana Revenue Authority (GRA) to implement VAT for residential customers of electricity above the maximum consumption level specified for block charges on lifeline units.

The implementation was scheduled to take effect on January 1, 2024, in line with Sections 35 and 37, and the First Schedule (9) of the Value Added Tax (VAT) Act, 2013 (ACT 870).

The ECG is yet to implement it.

On January 23, the Trade Union Congress (TUC) held a press conference to oppose the tax and gave the government a seven-day ultimatum to rescind the decision or face their wrath.

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