Akufo-Addo’s Cabinet Reportedly Drops 15% VAT On Electricity After Recent Agitation

• The government has agreed to drop the 15% VAT on Electricity after an agreement at cabinet
• The tax was to be charged to residential electricity customers above the maximum consumption level
• The Trades Union Congress had given the government until the end of January 2024 to withdraw the tax

The Akufo-Addo administration plans to drop the 15% value-added tax (VAT) on electricity, according to Asaase News reports.

The decision was taken at a meeting held on Friday, February 2, 2024.

The government has also agreed to initiate a conversation with the International Monetary Fund (IMF) to come to a consensus on how it can make up for the revenue shortfall.

“The position currently is that the 15% VAT on electricity is off, and it is likely it could either be off totally or significantly slashed,” the Asaase News sources said.

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"We have advised ourselves": Organised labour to hold demonstration against VAT on electricity on February 13

The government had plans to charge a Value Added Tax (VAT) on a section of electricity consumers in the country, sparking agitation from some unions.

Organised labour said it would hold a nationwide protest against the 15% VAT on Electricity on February 13, 2024.

A letter from the Ministry of Finance has shown that this tax was to be implemented on January 1, 2024.

This letter was addressed to the Electricity Company of Ghana and the Northern Electricity Distribution Company.

The tax was to be charged to residential electricity customers above the maximum consumption level specified for block charges for lifeline units.

It added that the VAT forms part of implementing the country's Covid-19 recovery plan.

Former President John Mahama has supported Trades Union Congress' call for the government to halt the VAT on electricity.

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Mahama said the government was worsening economic conditions in the country with the new tax.

The Trades Union Congress gave the government until the end of January 2024 to withdraw the tax.

Parliament passes New Revenue Bills

In April 2023, YEN.com.gh reported that Parliament passed three major revenue bills to improve Ghana's economy.

The new bills were the Growth and Sustainability Levy Bill of 2022, the Excise Duty Amendment Bill of 2022 and the Income Tax (Amendment) Bill of 2022.

Parliament, however, did not pass these bills unanimously because of stiff opposition from the Minority.

Source: YEN.com.gh