Suspend implementation of VAT on electricity – Finance Minister directs ECG, NEDCo

The Ministry of Finance has directed the Electricity Company of Ghana (ECG) and the Northern Electricity Distribution Company (NEDCO) to halt the implementation of the 15% Value Added Tax (VAT) directive.

This is until further consultations are conducted with key stakeholders, including organized labour.

This decision comes amid ongoing discussions regarding the VAT imposition on electricity and aims to foster inclusive dialogue to address concerns and explore alternative measures to bridge the fiscal gap while enhancing economic resilience.

A statement issued by the Ministry of Finance said it is expected that the engagements engagements will birth innovative, robust, and inclusive approaches to bridging the existing fiscal gap, while bolstering economic resilience.

“Reference is made to the Ministry of Finance’s (MoF) letter to the Electricity Company of Ghana, Ltd (ECG) and the Northern Electricity Distribution Company (NEDCO) on the above subject dated 12th December 2023; as well as MoF’s Press Statement on the subject issued on 30th January 2024. 

On behalf of the Government, MoF would like to inform ECG and NEDCO to suspend the implementation of the VAT directive pending further engagements with key stakeholders including Organised Labour,” it said.

“The Ministry expects that these engagements will birth innovative, robust, and inclusive approaches to bridging the existing fiscal gap while bolstering economic resilience,” the statement added.