Ghana’s Ministry of Finance has announced plans to hold extensive dialogue on the proposed imposition of Value Added Tax (VAT) on electricity consumption, after a cross section of Ghanaians criticized government for seeking to inflict more pain on them.
The aim of the dialogue is to ensure buy-in by all stakeholders.
According to the country’s Minister for Finance, Ken Ofori-Atta, the imposition of VAT on electricity consumption beyond the lifeline threshold (0-30kwh) forms part of IMF-Supported Post Covid-19 economic recovery programme.
The directive by the Finance Minister, Ken Ofori-Atta to management of the two power distribution companies in the West African nation, ECG and NEDCo to charge VAT on electricity consumption beyond lifeline effective January 1, 2024 had been met with stiff opposition by various interest groups in the country.
Last week Organised labour, issued a 7-day ultimatum to the Finance Minister to withdraw the directive warning that failure to do so would compel them to mobilize themselves to protest.
In a statement issued by the Finance Ministry on Tuesday, January 30, 2024, it said “The Ministry of Finance has noted the concerns of Organised Labour on the implementation of VAT on the consumption of electricity by residential customers.
Extensive dialogue will be held with Organised Labour and other key stakeholders in the coming weeks, to ensure stakeholder buy-in.”
The statement appealed to Organised Labour, the Electricity Company of Ghana (ECG), and the Northern Electricity Distribution Company (NEDCO) to exercise restraint to “facilitate constructive dialogue towards a quick resolution of the impasse.”
“The Ministry, therefore, appealed to Organised Labour and all stakeholders, including ECG and NEDCO, to exercise restraint to facilitate a constructive dialogue towards a quick resolution of the impasse.
“We note the progress the country is making in the implementation of the Post COVID-19 Programme for Economic Growth (PC-PEG), including posting higher than programmed growth targets, declining inflation, improvement in fiscal and external positions, a more stable exchange rate, and the declining Monetary Policy Rate,” the statement concluded.
Source: https://energynewsafrica.com/