TUC Urges The Government To Remove VAT On Electricity

TUC urges the government to remove VAT on electricity

By Majesty 3 Min Read
Dr Yaw Baah

The Finance Minister Ken Ofori-Atta has been instructed by the Trades Union Congress (TUC) to rescind the order that announced the implementation of the Value Added Tax (VAT) on electricity.

The VAT on energy, according to TUC Secretary-General Dr. Anthony Yaw Baah, will make the already severe financial difficulties that employees and retirees face worse.

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In light of this, they have granted the government till January 31st to revoke the order.

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“We should not allow it to continue; the poor, including retirees, always take the brunt. We, organised labour, are sending a message to the government today stating that we are unable to pay the power VAT and that we will not be paying it either today or tomorrow.

“As a result, organised labour is requesting that the Finance Minister issue an order ending the value-added tax on power usage. Therefore, we are allowing the administration until January 31, 2024, to retract the letter. “We will advise ourselves if by that time the directive to withdraw it has not been given,” Dr. Yaw Baah stated on Tuesday, January 23, at a press conference in Accra.

According to Sections 35 and 37 and the First Schedule (9) of the Value Added Tax (VAT) Act, 2013 (ACT 870), the Ministry of Finance has announced that the implementation of the 15% VAT for residential customers of electricity above the maximum consumption level specified for block charges for lifeline units has begun.

For the avoidance of doubt, in accordance with Sections 35 and 37 and the First Schedule (9) of Act 870, VAT is still free for “a supply to a dwelling of electricity up to a maximum consumption level specified for block charges for lifeline units,” according to a statement released by the Ministry.

It stated: “In accordance with Sections 35 and 37 and the First Schedule (9) of Act 870, the Electricity Company of Ghana (ECG) and the Northern Electricity Distribution Company (NEDCO) are, hereby, requested to liaise with the Ghana Revenue Authority (GRA) to ensure that the implementation of VAT for residential customers of electricity above the maximum consumption level specified for block charges for lifeline units takes effect on January 1, 2024.”

“By way of a copy of this letter, GRA is asked to make sure that, as part of its domestic VAT collections, it communicates with ECG and NEDCO regarding the transfer of the revenues obtained from the application of VAT on the subject matter.

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