The Government in a letter from the Minister of finance has justified the 15 percent VAT it is imposing on electricity consumption.
Government hopes to raise more revenue as part of its COVID-19 recovery program, and as part of the measures taken, directed the imposition of VAT on electricity.
According to the letter dated 1st January, Finance Minister, Ken Ofori-Atta had directed the Electricity Company of Ghana (ECG) and the Northern Electricity Distribution Company (NEDCO) to apply the VAT to residential customers exceeding the maximum consumption level for lifeline units.
Meanwhile, Andrew Agyapa, the Deputy Energy Minister, revealed that it was a difficult decision for the government but it has become necessary to do so to clear off debts owed to independent power producers.
“Obviously, if you look at the scope of the tax and what it is intended to do,it is to raise revenue to meet some obligations of the government in the energy sector and also, it will interest you to know that as we speak, as at July 2023, the amount of money that we owe to the IPPs alone is in the region of GH¢1.7 billion.”
However, the public and some prominent individuals has raised their voice concerning the incessant tax and increments.The Director of Business Operations at Dalex Finance, Joe Jackson, was among those who criticised the government’s decision to impose the VAT on consumers, describing it as harsh.
Kofi Kapito, the Chief Executive Officer (CEO) of the Consumer Protection Agency, also described it as ridiculous.
