Organized Labor has given the government a one-week ultimatum to withdraw the Value Added Tax (VAT) on electricity for residential customers.
According to the labor union, the implementation of VAT on electricity for residential customers would worsen the plight of the “already burdened” Ghanaian since the cost of electricity
would go up by more than 15 percent.
Addressing the press in Accra yesterday on behalf of organized labor, the Secretary-General of the Trades Union Congress (TUC), Dr. Yaw Baah, stressed that the government must withdraw the VAT with immediate effect or face the wrath of workers.

Dr. Baah stated that the TUC message to the government is very simple: ”We cannot pay VAT on electricity; we will not pay it today; we will not pay it tomorrow.”

The TUC Secretary-General explained that the TUC had sighted a letter from the Ministry of Finance, signed by the sector minister, Ken Ofori-Atta, and dated December 12, 2023, directing the Electricity Company of Ghana (ECG) and the Northern Electricity Distribution Company (NEDCo) to implement the VAT on electricity for residential customers. According to the letter, the two power distributors must start
“implementation of VAT for residential customers of electricity above the maximum consumption of level specified for block charges for lifeline units in line with section 35 and 37 and first
schedule of the VAT Act, 2013 (Act 870), effective January 1, 2024.”
The minister had explained in the letter that the measure was part of the government’s medium-term revenue strategy and that the International Monetary Fund (IMF) supported the post-COVID-19 program for economic growth.

However, Dr. Baah said the implementation of the directive had dire implications because it would increase the electricity bill for residential customers by at least 15 percent.
Dr. Baah said organized labor was prepared to go all out to ensure that the VAT on electricity for residential customers was withdrawn.

According to Dr. Baah, TUC is giving the government up to January 31, 2024, to withdraw the letter from the Finance Minister. If, by that time, the minister has not given the directive to ECG and NEDCo to stop the implementation of the VAT on residential customers, Ghanaian workers will advise themselves.
Dr. Baah said it was unacceptable that while the government was imposing VAT on residential consumers of electricity, plans were advanced to remove VAT on mineral exploration in the country for wealthy multinational mining companies.

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