Ghana: Electricity Tariff Has Not Gone Up By 17.5%-ECG

Ghana’s power distribution company, Electricity Company of Ghana (ECG), has refuted media report suggesting that electricity tariff has gone up by 17.5 percent.

Some online portals are reporting that government after absorbing cost of electricity for lifeline customers and 50 percent rebate for commercial users, for three months had turned around to slap consumers with 17.5 percent tariff.

However, the state power distributor, in a disclaimer issued, said: “ECG wishes to inform its cherished customers and the general public that the PURC, which is mandated by law to set tariffs, has not informed ECG of any increase in tariff, neither has the ECG received notice from the Government of Ghana of new or increased taxes to be applied to the current electricity tariff structure.”

The ECG, thus, urged customers and the general public to ignore the misinformation.

Checks at the utilities regulator, PURC, indicated that there has not been any increase in electricity tariff as suggested by some online portals.

Meanwhile, Head of Audit at the Large Taxpayers Office of the GRA, Dr Martin Yamborigya, has also dismissed the claim that new taxes had been imposed on electricity consumers, thereby, increasing the levy.

He explained that per the Value Added Tax Act, 2013 (Act 870), electricity in general was supposed to be taxable, except the domestic use up to the lifeline tariff (between 0-50 kilowatts), which the government gave out for free to consumers for the three-month period.

Dr Yamborigya added that there is already a VAT component on electricity bills since 2014 when Act 870 started with implementation, hence, consumers already pay taxes, and that is not new.

He further clarified that power producers are supposed to charge VAT on what they produce before they sell to Electricity Company of Ghana (ECG).
This is known as the input tax.
ECG also charges output tax before selling to consumers, and is supposed to account for both the input and output tax, and deduct the input from the output and pay the difference to GRA.

“However, what is happening now is that when the power producer is billing ECG, they don’t include the VAT, but ECG charges consumers VAT.

“So ECG calculates only the VAT it charges consumers at the end of the month. So they are not able to pay all the amount which has led to huge debt of about GH₵350 million. In view of this development, we decided to spread it in order to lessen the burden on ECG,” Dr Yamborigya said.

Source:www.energynewsafrica.com