15% VAT On Electricity: Gov't To Jaw-jaw With TUC?

It is likely the Akufo-Addo led New Patriotic Party (NPP) will jaw-jaw with the leaders of the Trades Union Congress (TUC) and organized labour over the implementation of the 15% tax on electricity.

An NPP National Communication Team Member, Enoch Afoakwah, who gave the hint, added that the current administration is a listening government hence the heeding to the call for a dialogue with the TUC and the organized labour.

He was contributing to a panel discussion on TV3's Big Issues, on Wednesday morning.

"The government understands the pain, the government understands the sensitivity of the people of Ghana. Government will have a dialogue with the TUC.....We will negotiate with TUC and organized labour as far as this tax measures are concerned and we believe that we will do what will serve the good people of Ghana well as we have always been doing," Mr. Afoakwah added.

The Finance Minister, Ken Ofori-Atta, per a letter dated December 12, 2024, directed the Electricity Company of Ghana (ECG) and the Northern Electricity Distribution Company (NEDCO) to implement the VAT on electricity for residential customers.

Portions of the letter further explained that, the implementation was part of the government’s measure for the medium term revenue strategy and the International Monetary Fund (IMF) supported post COVID-19 programme for economic growth.

However, the TUC, led by Secretary General Dr. Yaw Baah, vehemently opposed the move, citing its detrimental impact on the livelihoods of ordinary Ghanaians, particularly pensioners and low-income earners, saying it only adds up to the burdens of an already burdened citizenry.

At a press conference on Tuesday, the TUC gave government a one week ultimatum to withdraw the VAT on electricity directive. 

The NPP Communicator pointed out that the government is mindful of sustaining the gains made in reviving the economy, and will thus not seek to unnecessarily suffocate Ghanaians, moreso in an election by introducing unpopular tax policies.