TUC gives govt a 7-day ultimatum to withdraw VAT on electricity

The Trades Union Congress (TUC) has given the government seven days to withdraw the imposition of Value Added Tax (VAT) on electricity.

In a letter, Finance Minister Ken Ofori Atta stated that any electricity consumption above lifeline units would attract a 15% value-added levy.

But speaking at a press conference in Accra on Tuesday, January 23, 2024, the Secretary General of the TUC, Dr Yaw Baah, said the VAT was detrimental to the livelihood of ordinary Ghanaians.

“It’s always the poor people in this country, including pensioners, who bear the brunt. And we should not allow that to continue. Organised labour, we have come together, and our message to the government is very simple: we cannot pay VAT on electricity.

“We will not pay it today or tomorrow. Organised labour is demanding the immediate withdrawal of the letter and another directive from the Finance Minister to Ghana Grid Company (GRIDCo), ECG, to stop the implementation of the VAT on electricity. We are giving the government up to January 31, 2024, to withdraw the letter,” Dr Yaw Baah said.

He added that they would advise themselves if the finance minister fails to direct GRIDCo and ECG to withdraw the letter.

“If by that time the minister of finance fails to give directive to GRIDCO and ECG, we will advise ourselves,” he said.

Meanwhile, the government has justified the 15% VAT on electricity.

It says the measure is part of the government’s COVID-19 recovery programme, aiming to generate additional revenue.

Deputy Energy Minister Agyapa Mercer, speaking in an interview on Monday, January 15, emphasised that it was a challenging decision.

However, he said, settling debts owed to independent power producers was necessary.