The Ghanaian government has reportedly decided to reverse the previously approved policy of imposing a 15% Value Added Tax (VAT) on electricity.
Asaase Online in a report says according to sources close to the government, Cabinet unanimously agreed to drop the VAT on electricity during a meeting held on February 2, 2024.
The decision comes after strong opposition and criticism from the Trade Unions Congress (TUC) and other stakeholders.
While the 15% VAT on electricity had received prior approval from both Cabinet and Parliament, the negative reaction from various groups prompted a serious reconsideration of the policy.
The government has now expressed its intention to engage with the International Monetary Fund (IMF) to discuss potential alternatives for making up for the revenue shortfall resulting from dropping the VAT on electricity. The final decision on the policy is expected to become clearer after these discussions with the IMF.
“The position currently is that the 15% VAT on electricity is off, and it is likely it could either be off totally or significantly slashed,” Asaase News sources said on condition of anonymity.
Organized Labour in Ghana convened a meeting on February 2, 2024, where a decision was made to stage a nationwide demonstration on Tuesday, February 13, 2024. T
he purpose of the demonstration is to press the government to withdraw the directive given to the Electricity Company of Ghana (ECG) and the Northern Electricity Distribution Company (NEDCO) to implement a 15% Value Added Tax (VAT) on residential electricity consumption.