Sunday, 14 July

Gov’t drops 15% electricity VAT implementation

President Nana Akufo-Addo

The Akufo-Addo Cabinet has dropped the 15 per cent value-added tax on electricity idea, reports by Asaase Radio indicated.

The decision, according to the Accra-based FM station, was taken at a Cabinet meeting on Friday, 2 February.

The government, however, intends to engage in discussions with the International Monetary Fund (IMF) to address the resulting revenue shortfall.

This shortfall is expected to be mitigated through additional spending cuts.

To demonstrate their opposition to the government's implementation of the 15% value-added tax on electricity, Organised Labour planned a nationwide march on 13 February 2024.

This followed an earlier ultimatum to the government to withdraw the implementation.

On 23 January 2024, TUC Secretary-General Anthony Yaw Baah told journalists at a press conference: "It’s always the poor people in this country, including pensioners, who bear the brunt. And we should not allow that to continue. Organised Labour, we have come together and our message to the government is very simple, we cannot pay VAT on electricity.”

“We will not pay it today or tomorrow. Organised Labour is demanding the immediate withdrawal of the letter, and another directive from the Finance Minister to Ghana Grid Company (GRIDCo), ECG to stop the implementation of the VAT on electricity. We are giving the government, up to January 31, 2024, to withdraw the letter,” Dr Yaw Baah said.

On Friday, 2 February 2024, Dr Baah told journalists: “In our earlier statement, we said if by the 31st of January 2024, the government had not withdrawn its directive, we would advise ourselves. So, this afternoon, we’ve met here, and we’ve advised ourselves". 

"It is that advice that we will communicate to the president. Our advice is straightforward: We have advised ourselves that this government is taking us for granted, so, we are going to lead massive demonstrations in all the 16 regional capitals of Ghana on 13th February.”