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The Ministry of Finance has communicated a modification in the Value Added Tax (VAT) for a specific segment of electricity consumers in Ghana.
The letter, signed by the Minister for Finance, Ken Ofori-Atta, and directed to the Electricity Company of Ghana (ECG) and the Northern Electricity Distribution Company (NEDCO), outlines that VAT will now be applicable to residential customers exceeding the maximum consumption level specified for block charges for lifeline units.
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According to the letter, VAT has been introduced as part of the country’s Covid-19 recovery program and is set to be levied from January 1, 2024.
The implementation aligns with the government’s Medium-Term Revenue Strategy and the IMF-Supported Post Covid-19 Programme for Economic Growth (PC-PEG).
The letter emphasizes that while VAT will be applicable for residential customers above the specified maximum consumption level, it remains exempt for electricity supply to a dwelling up to the defined maximum consumption level for lifeline units.
In instructing the ECG and NEDCO, the minister requested collaboration with the Ghana Revenue Authority (GRA) to ensure the effective implementation of VAT from the specified date. The communication underscores the government’s commitment to revenue strategies and economic recovery measures in the aftermath of the Covid-19 pandemic.
