The Director of Research at the Institute of Economic Affairs, Dr. John Kwakye, has said the government has not stayed true to its pledge to move Ghana’s economy from taxation to production.
Instead, it has become one of the governments with the most taxes in the country’s history.
In a letter by the Ministry of Finance on January 10, 2024, it served notice that customers of electricity above the maximum consumption level will from January 1, 2024, be charged a Value Added Tax.
Dr. Kwakye wrote on X: “Contrary to its pledge to move the economy from taxation to production, this Gov't will go down in history as one of the most taxing Gov'ts.”
See the government’s full statement on the VAT implementation below:
IMPLEMENTATION OF VALUE ADDED TAX (VAT) ON THE SUPPLY OF ELECTRICITY ABOVE THE LIFELINE FOR RESIDENTIAL PURPOSE
1. As part of the implementation of the Government's Medium-Term Revenue Strategy and the IMF-Supported Post-COVID-19 Programme for Economic Growth (PC-PEG). the implementation of VAT for residential customers of electricity above the maximum consumption level specified for block charges for lifeline units in line with Sections 35 and 37 and the First Schedule (9) of the Value Added Tax (VAT) Act, 2013 (ACT 870) has been scheduled for implementation, effective 1st January 2024.
2. For the avoidance of doubt, VAT is still exempt for "a supply to a dwelling of electricity up to a maximum consumption level specified for block charges for lifeline units” in line with Sections 35 and 37 and the First Schedule (9) of Act 870.
3. The Electricity Company of Ghana (ECG) and the Northern Electricity Distribution Company (NEDCO) are, hereby, requested to liaise with the Ghana Revenue Authority (GRA) to ensure that the implementation of VAT for residential customers of electricity above the maximum consumption level specified for block charges for lifeline units takes effect on Is January 2024, in line with Section 35 and 37 and the First Schedule (9) of Act 870,
4. By a copy of this letter GRA is requested to ensure that it liaises with ECG and NEDCO for the transfer of the revenues collected from the implementation of VAT on the subject matter as part of its domestic VAT collections.
5. We are counting on your usual cooperation in this regard.
SSD/NOQ
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