Send GHANA, a policy research and advocacy civil society organisation (CSO), has backed Organised Labour’s call for the withdrawal of 15 percent Value Added Tax (VAT) on electricity.
It said the implementation of the 15% VAT tax on residential electricity consumption will burden and undermine the welfare of ordinary Ghanaians who are already grappling with multiple hardships and economic challenges.
“This tax will further exacerbate the financial strain on households, particularly those with limited income, by increasing their utility bills and reducing their disposable income. Access to affordable electricity is crucial for supporting livelihoods, enhancing the quality of life for all citizens and ultimately for driving economic growth,” it added.
Send GHANA therefore urged government to come clear on its decision regarding the tax.
“There have been some media reports stating that after a cabinet meeting on Friday, February 2, 2024, the government has decided to cancel the 15% VAT on residential electricity. However, we are concerned that we have not seen any official statement to that effect, hence, we cannot rely on it. If indeed what we are hearing from a section of the media is true, we expect a formal communication from the Ministry of Finance or the President to that effect,” it stated in a press release signed by the Deputy Country Director, Dr. Emmanuel Ayifah.
It urged that government as a matter of urgency must prioritise the welfare of citizens by heeding the legitimate concerns raised by organised labour and immediately reverse the decision to impose a 15% VAT on electricity.
“We urge the Ministry of Finance to engage in meaningful dialogue with stakeholders, including workers’ unions, civil society organizations, and the private sector, to explore alternative revenue generation measures that are equitable and do not place an undue burden on vulnerable populations.
We acknowledge the importance of the government’s Medium-Term Revenue Strategy and the IMF Post-COVID-19 Program for Economic Growth (PC-PEG). However, we believe that this should not be achieved at the expense of the most vulnerable segments of our society,” it added.
As an organisation committed to advocating for social justice and inclusive development, Send GHANA reassures of its commitment to continue to work alongside key stakeholders to champion policies that promote the well-being and prosperity of all Ghanaians.
