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Withdraw 15% VAT on electricity — SEND GHANA

Withdraw 15% VAT on electricity — SEND GHANA

SEND GHANA, a civil society organisation advocating social justice and inclusive development, has thrown its weight behind organised labour and concerned citizens across the country in calling for the complete withdrawal of the 15 per cent Value Added Tax (VAT) on residential customers of electricity consumption.

The tax applies to consumptions above the maximum consumption level for lifeline consumers, whose consumption is limited to 30 kilowatt-hours per month.

A statement issued by SEND Ghana said it acknowledged the importance of the government’s Medium-Term Revenue Strategy and the International Monetary Fund (IMF)’s Post COVID-19 Programme for Economic Growth (PC-PEG).

“However, we believe that this should not be achieved at the expense of the most vulnerable segments of our society,” it said. 

Financial strain

SEND GHANA also said the implementation of the 15 per cent VAT on residential electricity consumption would burden and undermine the welfare of ordinary Ghanaians who were already grappling with multiple hardships and economic challenges.

“This tax will further exacerbate the financial strain on households, particularly those with limited income, by increasing their utility bills and reducing their disposable income.

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Access to affordable electricity is crucial for supporting livelihoods, enhancing the quality of life for all citizens and ultimately for driving economic growth,” the statement stressed.

Cabinet

SEND GHANA said despite some media reports that Cabinet had withdrawn the 15 per cent VAT on residential electricity, there had not been any official statement to that effect; hence, the information could not be relied on.

“If indeed what we are hearing from a section of the media is true, we expect a formal communication from the Ministry of Finance or the Presidency to that effect,” the civil society organisation said.

It called on the government to prioritise the welfare of citizens by heeding the legitimate concerns raised by organised labour and immediately reverse the decision to impose a 15 per cent VAT on electricity.  

“We urge the Ministry of Finance to engage in meaningful dialogue with stakeholders, including workers' unions, civil society organisations, and the private sector to explore alternative revenue generation measures that are equitable and do not place an undue burden on vulnerable populations,” the statement concluded. 

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