Government to engage Organised Labour on 15 per cent VAT on electricity

The government will in the coming weeks hold “extensive dialogue” with Organised Labour and other key stakeholders to ensure buyin for the introduction of 15 per cent Value Added Tax (VAT) on electricity.

This followed agitation by stakeholder groups including the labour unions over the policy that seeks to tax the consumption of electricity by residential customers. A statement from the Ministry of Finance 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. The statement noted that government was committed to working with all stakeholders to sustain economic gains and engender macroeconomic stability and inclusive growth in the country.

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 said.

The Ministry of Finance in a letter dated December 12, 2023, instructed the Electricity Company of Ghana (ECG) and the

Northern Electricity Distribution Company (NEDCO) to in January this year apply the VAT to residential customers exceeding the maximum consumption level for lifeline units. In its response, the Organised Labour through the Trade Union Congress, on January 23, gave the government a seven-day ultimatum to withdraw the policy. It criticised the timing of the policy which it said would worsen the economic conditions of Ghanaians. GNA