The Institute of Energy Security (IES) has called on the government to prioritize addressing the revenue challenges of the Electricity Company of Ghana (ECG) by enhancing its resources rather than introducing additional taxes.
In response to the government's announcement of a 15 per cent Value Added Tax (VAT) on electricity consumption exceeding certain levels, the IES emphasized that tackling technical and commercial losses incurred by the ECG would be more effective in boosting revenue than implementing new taxes.
Mr Andrew Agyapa Mercer, Deputy Energy Minister, defended the government's decision, stating its necessity to settle debts owed to independent power producers. However, the IES stressed the importance of reducing technical losses to minimize revenue losses.
Nana Amoasi VII, Executive Director of the IES, emphasized the need for ECG to invest in smart meters capable of detecting theft, as well as upgrading distribution infrastructure to minimize losses.
Critiquing the government's approach to energy sector policies, Nana Amoasi VII highlighted the importance of engaging citizens transparently and considering alternative views to strengthen the sector.
Expressing concerns over the adverse economic impact of the VAT on electricity, unions such as the Trades Union Congress (TUC) and the Ghana Union of Traders Association (GUTA) opposed its implementation. Dr Joseph Obeng, President of GUTA, emphasized the burden it would place on businesses, exacerbating the high cost of doing business.
Mr Joshua Ansah, Deputy Secretary-General of TUC, criticized the lack of official communication from the government regarding the withdrawal of the tax, stating that social media announcements were insufficient. He affirmed that the union would proceed with its planned demonstration until receiving official confirmation of the tax withdrawal.