Former President John Mahama is the latest to add his voice to calls for the reversal of the Value Added Tax (VAT) on electricity.
There are growing calls from the Minority and energy experts for the reversal of a Value Added Tax imposed on some categories of residential electricity consumers.
In a letter communicating its policy to the Public Utility Regulatory Commission, Finance Minister Ken Ofori Atta states that any electricity consumption above lifeline units will attract the value-added levy.
The ministry explains that the move is part of the government’s Covid-19 recovery programme.
However, the National Democratic Congress’ (NDC) presidential candidate says the move will only pile up the cost of electricity, which has seen a 29 percent increase.
Mr. Mahama argues that the increase in the electricity bill will make the cost of doing business in Ghana unbearable.
“Today, they’ve put Value Added Tax on electricity bills and Covid levy, GETFund levy, NHIS levy on electricity bill and so that is going to send the cost of your electricity up.
“Already, there was a 29% and 19% increase then they tried to fool us with a 4% decrease and now it is going up again astronomically making Ghana a very difficult place to do business,” he lamented.
Also, Energy expert, Kwadwo Nsafoah Poku has bemoaned government’s timing in introducing VAT on electricity.
In an interview on Joy FM’s Top Story on Wednesday, Mr Poku expressed the view that while taxes may be necessary to address the energy crisis, imposing them all at the beginning of the year, especially alongside various other taxes, is not ideal.
“I think the timing is wrong. It is a wrong time to introduce more VAT on electricity at this stage,” he said.
According to the energy expert, in as much as there is a cry for more money to be raised to fix the Electricity Company of Ghana and the energy sector, the implementation date should be reconsidered.
He believes there is a need for sensitisation around the VAT introduction on electricity, adding that there is a need to update ECG’s software.
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