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The Ghanaian government has apparently decided to revoke the previously agreed policy of levying a 15% Value Added Tax (VAT) on energy.
According to Asaase Online, sources close to the government reported that during a meeting on February 2, 2024, Cabinet unanimously agreed to eliminate the VAT on electricity.
The decision was met with intense opposition and condemnation from the Trade Union Congress (TUC) and other stakeholders.
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While Cabinet and Parliament had previously approved a 15% VAT on electricity, the negative reaction from diverse organizations caused a critical reassessment of the proposal.
The administration has now stated that it intends to consult with the International Monetary Fund (IMF) about potential revenue sources to compensate for the revenue gap caused by the removal of the VAT on energy. The ultimate policy choice is expected to be clearer following these discussions with the IMF.
“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,” Asaase News sources said on condition of anonymity.
On February 2, 2024, Organized Labour in Ghana had a meeting and decided to conduct a statewide rally on Tuesday, February 13, 2024.
The demonstration’s goal is to persuade the government to reverse the directive issued to the Electricity Company of Ghana (ECG) and the Northern Electricity Distribution Company (NEDCO) to impose a 15% Value Added Tax (VAT) on domestic electricity consumption.
