Labour and alternative dispute resolution (ADR) expert, Austin Gamey, has urged the government to swiftly engage with labor representatives to address concerns regarding the recent imposition of a 15% Value Added Tax (VAT) on electricity.
He emphasized the need for urgent discussions to devise strategies that could alleviate the impact on workers, promoting stability in labor relations.
“Petrol has been increased by three per cent and the Ghana Private Road Transport Union (GPRTU) is threatening to increase fares by 60 per cent.
“We have just imposed a tax on electricity and so obviously, people would like you to cushion them.
“If the government is smart, it should invite them to a national tripartite committee meeting and use the tax thresholds to give everybody something,” Mr Gamey told the Daily Graphic in an interview.
Austin Gamey emphasized that the Labour Law mandates the tripartite body—comprising representatives from the government, employers, and labor—to regularly convene, at least quarterly, to discuss matters crucial to the national economy.
He highlighted that the recent imposition of a 15% Value Added Tax (VAT) on electricity was a concern for unions, and engaging in discussions would allow them to address the potential impact on their members and raise pertinent concerns.
“So the government would have to be sharp and be forthcoming and invite experts who have a better appreciation of how these things are done to assist them,” he said.
Austin Gamey serves as the Chief Executive Officer (CEO) of Pulse Institute Africa.
Austin Gamey emphasized the importance of the government tapping into the expertise of the entire Ghanaian population, which consists of around 30 million people. He stressed that the country does not belong to any single political party, and leveraging the collective knowledge and skills of its citizens is crucial. Failure to do so, he warned, could result in the government facing increased pressure from labor issues.
Gamey argued that labor would be justified in making demands to cushion its members in response to the recent 15% Value Added Tax (VAT) on electricity. He cited a precedent in 2015 when former President John Mahama invited all labor unions, including chiefs, to a meeting in Ho. During this meeting, information about the country’s situation was shared with the unions, helping them understand the potential consequences of extreme actions.
The Ministry of Finance announced the implementation of the 15% VAT for residential customers of electricity as part of the government’s Medium-Term Revenue Strategy and the International Monetary Fund (IMF) Supported Post Covid-19 Programme for Economic Growth. The VAT applies to residential customers with electricity consumption above specified levels, effective January 1, 2024. The move aims to enhance revenue collection.