Withdraw VAT on Electricity Or Face Our Wrath – TUC to Govt

The Trades Union Congress (TUC) has bared its teeth at the government over plans to introduce a Value-Added Tax (VAT) on residential electricity consumption exceeding lifeline units.

At a press conference on Tuesday, the General Secretary of TUC, Dr. Yaw Baah demanded withdrawal of the directive by the Finance Ministry.

Kicking against the tax, he did not mince words when he conveyed the citizenry’s concern and resolve to go against it.

“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.”

He added, “If by that time the Minister of Finance fails to give a directive to GRIDCO and ECG, we will advise ourselves.”

Already, some Ghanaians have spoken against the announced measure, noting it will astronomically hike their charges and impact businesses as well as increase the cost of living in the country but the Ministry of Finance insists it is in accordance with the government’s medium-term strategy and IMF-Supported Post-COVID-19 Programme.

The Finance Minister, Ken Ofori Atta, in a letter dated December 12, 2023, directed the 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 for 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.