Politics

It Is Inappropriate To Charge A 15% VAT For Electricity Consumption – Alan

The Movement for Change’s founder and leader, Alan Kwadwo Kyerematen, has criticized the government for enacting a new Value Added Tax (VAT) on energy users who use more than the minimum amount.

The government’s plan to impose a 15% VAT on power use, according to the former minister of trade and industry, was not acceptable at this time.

It Is Inappropriate To Charge A 15% VAT For Electricity Consumption – Alan

He claimed in a social media post that Ghanaians are already struggling and that this will make things worse.

“In the kind of economic situation we find ourselves, every government policy, plan or decision, has to have the objective of achieving the following; reduce the cost of living, reduce the cost of doing business, reduce exchange rate, and create sustainable jobs for the youth” the former minister said in a post on X (formerly Twitter).

He added, “Putting VAT on electricity will not achieve any of the above. It would rather worsen the plight of the ordinary Ghanaian”.

Meanwhile, he has assured Ghanaians that his Great Transformational Plan (GTP), “as a trusted roadmap, would guide us to achieve the above objectives and more.”

Background

The Ministry of Finance announced in the second week of January that the government has imposed a value-added tax (VAT) on a specific section of electricity consumers in the country.

The letter, addressed to the Electricity Company of Ghana (ECG) and the Northern Electricity Distribution Company (NEDCO), was signed by the Minister for Finance, Ken Ofori-Atta.

The letter explained that VAT will apply to residential electricity customers above the maximum consumption level specified for block charges for lifeline units. This move is part of the government’s COVID-19 recovery programme and took effect on January 1, 2024.

The letter future noted that the implementation of VAT for residential customers of electricity is in line with Sections 35 and 37 and the First Schedule (9) of the Value Added Tax (VAT) Act, 2013 (ACT 870). The government aims to generate revenue through this initiative and support the country’s medium-term revenue strategy and the IMF-supported Post-COVID-19 Programme for Economic Growth (PC-PEG).

However, it is important to note that VAT will remain exempt for “a supply to a dwelling of electricity up to a maximum consumption level specified for block charges for lifeline units,” as mentioned in Sections 35 and 37 and the First Schedule (9) of Act 870.

The Minister requested that ECG and NEDCO collaborate with the Ghana Revenue Authority (GRA) to ensure the effective implementation of VAT from January 1, 2024.

The companies are expected to put the necessary measures in place to facilitate the collection of VAT from residential customers above the maximum consumption level.

Akosua Boatemaa

I'm Yours Truly, Blogger Akosua Boatemaa. I'm here to feed Your eyes and Ears with Authentic News Updates.

Related Articles

Leave a Reply

Back to top button

Adblock Detected

Please turn off your Ads Blocker to better serve you and provide you with the best.