Government defends 15% VAT on Electricity, cites COVID-19 recovery and debt settlement

Government defends 15% VAT on Electricity, cites COVID-19 recovery and debt settlement
Street in Ghana

The government has provided justification for the imposition of a 15% Value Added Tax () on electricity consumption, aiming to generate additional revenue for the recovery program.

In a letter dated January 1, Finance Minister directed the (ECG) and the Northern Electricity Distribution Company (NEDCO) to apply the VAT to residential customers exceeding the maximum consumption level for lifeline units.

Deputy Energy Minister Andrew Agyapa Mercer acknowledged the difficulty of the decision but emphasized its necessity to settle debts owed to independent power producers, stating, “As we speak, as of July 2023, the amount of money that we owe to the IPPs alone is in the region of GH¢1.7 billion.”

Critics, including Joe Jackson from Dalex Finance and Kofi Kapito, CEO of the Consumer Protection Agency, have condemned the government's decision, describing it as harsh and ridiculous, respectively.

Leave a Reply

Your email address will not be published.