CPA kicks against 15% VAT on electricity
The Consumer Protection Agency (CPA) has kicked against the 15 per cent Value Added Tax (VAT) imposed on household electricity consumption.
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Addressing a press conference in Accra yesterday, the Chief Executive Officer (CEO) of CPA, Kofi Kapito, said it would resist any attempt by the government to introduce the tax he described as "killer tax" on electricity users.
"They talk about lifeline consumers which is only 30 units; no Ghanaian will benefit from this. If you use radio, fan, television and fridge you will be outside the 30 units government is talking about. Let's kick against this killer VAT," the CEO added.
He said the agency would join the Trades Union Congress (TUC) which had earlier registered its displeasure at the proposed tax to stop its implementation.
"We are in solidarity with the TUC who have also sounded an alarm to the government to desist from this implementation which is due today.
“Laws are made for Ghanaians and if they say they don't want these taxes, the government must listen," the CEO added.
Mr Kapito said the implementation of the 15 per cent VAT could amount to double taxation as the people were already paying VAT on commodities from shops.
Tariff hikes
The CEO also alleged that consumers were likely to see another increment in utility tariffs by the Public Utilities Regulatory Commission (PURC) whose regulations allows it to review tariffs for electricity and water every quarter.
The press in Accra
"If the government brings this 15 per cent VAT and by March-April the PURC also comes up with another increment which is estimated to be between four and six per cent, how are we going to pay?" Mr Kapito queried.
As an alternative, the CEO urged the government to reduce its expenditure and the size of government to cut cost.
"Why is the government not looking at how it can encourage metropolitan, municipal and district assemblies (MMDAs) to consider valuing properties for owners to pay realistic taxes.
"People are living in multi-million dollar houses in the country, but their property rate payment is nothing to write home about. Is it because they are owned by people in government?" he asked.
Finance Ministry response
Meanwhile, the Ministry of Finance has said it has noted the concerns of Organised Labour on the implementation of VAT on consumption of electricity by residential customers.
The ministry in a statement last night said it would hold an extensive dialogue with Organised Labour and other key stakeholders in the coming weeks, to ensure stakeholder buy-in.
“The Ministry therefore appeals to Organised Labour and all stakeholders, including ECG and Northern Electricity Distribution Company (NEDCO), to exercise restraint to facilitate a constructive dialogue towards a quick resolution of the impasse,” a release from the Public Affairs Unit of the Ministry stated.