The Chief Executive Officer of Gasop Oil Limited and Energy Expert, Kojo Nsafoah Poku has raised concerns about the government’s decision to implement Value Added Tax (VAT) on electricity consumption.
In a letter dated January 1, Minister of Finance, Ken Ofori-Atta instructed the Electricity Company of Ghana (ECG) and the Northern Electricity Distribution Company (NEDCO) to apply the Value Added Tax (VAT) to residential customers exceeding the maximum consumption level.
However, energy expert, Kojo Nsafoah Poku has argued that the implementation of Value Added Tax on electricity consumption though not a bad policy, but the period of its implementation on electricity consumption of residential consumers is not favourable considering the state of the economy.
In Ghana, electricity consumption is divided into categories such as residential and commercial. Back in 1998, a bill was passed to allow for the application of Value Added Tax (VAT) on electricity. However, at that time, this tax only affected commercial and industrial customers, excluding residential consumers. While this tax was supposed to be initiated, there was a delay in its implementation.
Presently, there is a renewed effort to enforce this policy.
Several experts have raised concerns regarding this matter across different platforms. They’ve highlighted the impact of increased prices of petrol and electricity on the overall standard of living in the nation. They’ve emphasized that adding taxes on electricity consumption not only raises electricity costs but also leads to increased prices of various items.
Adding to this clarion call in an interview on Peace FM, Kojo Nsafoah Poku intimated “Taxes are good for the country but we are pleading on behalf of Ghanaians to the government to reconsider the timing and hold on with the Value added tax on electricity consumption.”
He is therefore urging the Ministry of Finance to temporarily suspend the implementation of the Value Added Tax (VAT) on electricity consumption to alleviate financial burdens on citizens for daily expenses.
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Source: Angelina Riley Hayford/ATLFMNEWS
