Govt, Organised Labour fail to agree on reduction in taxes

BY: Kwame Asare Boadu
Mr Haruna Iddrisu

The government and labour yesterday continued discussions on the recent increment in petroleum prices and utility tariffs, with the government insisting that it would be difficult to withdraw the levies that had led to the upward adjustments.

It was the second time in less than two weeks that the two sides had met on the vexed issue, both having ended inconclusively.

The Minister of Employment and Labour Relations, Mr Haruna Iddrisu, told the Daily Graphic that “it will be difficult, if not impossible, to withdraw the levies”.

He maintained that the levies were necessary to offset some outstanding debts, bring the load-shedding to a complete close and ensure a clean balance sheet of the budget.

Cushioning workers

Mr Iddrisu said the meeting also discussed how the government would cushion workers with a base pay increase or Cost of Living Allowance (COLA) to compensate for the increases.

On calls for the reduction in tariff increases announced by the Public Utilities Regulatory Commission (PURC), he said the government team had been asked to work out the numbers to be considered to see what review could be accommodated by the government without hurting revenue.

“The PURC will take a decision based on the numbers to be submitted and what it could accommodate, “ he said.

Other members of the government negotiation team were the Deputy Minister of Power, Mr John Jinapor, and a Minister of State at the Presidency, Mr Elvis Afriyie Ankrah.

The recent increases in fuel prices by between 19 and 27 per cent were triggered by the passage of the Energy Sector Levy, 2015 by Parliament in December 2015.

The PURC also announced new utility tariffs, with electricity and water going up by 59.2 per cent and 67.2 per cent, respectively.

Organised Labour, the Ghana Employers Association (GEA) and the Association of Ghana Industries (AGI) protested against the increases and called for a reversal.

An earlier meeting at the Flagstaff House to find a way out ended inconclusively, as both the government and the labour teams took entrenched positions.

Even before yesterday’s meeting, Organised Labour had threatened a series of actions to back it demands.

In a release, it gave the government up to the close of day on January 13, 2016 to meet its demands, otherwise it would embark on a number of actions, including a two-day nationwide strike, beginning January 21 this year.

A source close to Organised Labour told the Daily Graphic that representatives of the groups that met the government demanded a reduction of about 20 per cent in water and electricity tariffs.

It said during the meeting, Organised Labour drew the attention of the meeting to a 10 per cent rise in power inherent in the levy that automatically raised tariffs, especially for prepaid consumers.

The source said officials of the Electricity Company of Ghana (ECG) admitted the interest adjustment, saying consumers had started paying.

It said from what transpired at the meeting yesterday, Organised Labour had decided to go ahead with its mass actions in Accra and the regions next week.

The source said Organised Labour had already notified the police and agreed on routes.