The Electricity Company of Ghana (ECG) has stated that has not yet started the implementation of the proposed 15 per cent charge of Value Added Tax (VAT) on electricity consumption for non-lifeline residential customers.
A few weeks ago, the Ministry of Finance in a letter, directed the Ghana Revenue Authority (GRA) to liaise with ECG and the Northern Electricity Distribution Company (NEDCO) “to ensure that the implementation of VAT for residential customers of electricity above the maximum consumption level specified for block charges for lifeline units take effect on 1st January 2024.”
This, according to the ministry, was in line with Sections 35 and 37 and the First Schedule (9) of the Value Added Tax (VAT) Act, 2013 (ACT 870).
“By a copy of this letter, GRA is requested to ensure that it liaises with ECG and NEDCO for the transfer of the revenues collected from the implementation of VAT on the subject matter as part of its domestic VAT collections,” the Finance Ministry directed.
However, Mr Charles Nii Ayiku Ayiku, the General Manager-External Communication at the ECG, told the Ghana New Agency that the company was yet to start the implementation of the VAT on residential electricity consumption above the lifeline category.
According to him, residential customers are currently consuming power at the approved tariff rate by the Public Utility Regulatory Commission (PURC).
On when the implementation of the VAT would commence, he said meetings were ongoing and the public would be made aware of its commencement before it would be rolled out.
Nii Ayiku explained that lifeline users of electricity comprise those who consume between zero and 30 units of energy within a month.
‘We won’t pay’
Meanwhile, Organised Labour has served notice that no Ghanaian will pay the VAT on electricity.
Addressing a news conference in Accra yesterday, the Secretary General of the Trades Union Congress (TUC), Dr. Yaw Baah said Ghanaians cannot afford additional taxes on electricity at these challenging times.
“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. It is always the poor people in this country, including pensioners, who bear the brunt,” he stated, stressing that “And we should not allow that to continue.”
Complete withdrawal
The TUC Secretary General called on government to immediately halt the intended imposition of VAT on electricity.
“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. If by that time the minister of finance fails to give directive to GRIDCO and ECG we will advise ourselves,” Dr. Yaw Baah warned.
