The Ministry of Finance has stated that the 15% Value Added Tax (VAT) on residential energy consumers who exceed the maximum usage level established for block charges for lifeline units has begun.
The Ministry stated that this is consistent with Sections 35 and 37, as well as the First Schedule (9) of the Value Added Tax (VAT) Act of 2013 (ACT 870).
Effective January 1, 2024.
According to the Ministry, this is part of the execution of the Government’s Medium-Term Revenue Strategy as well as the International Monetary Fund (IMF)-supported Post-Covid-19 Programme for Economic Growth (PC-PEG).
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To be clear, according to a Ministry statement, VAT is still excluded for “a supply of electricity to a dwelling up to a maximum consumption level specified for block charges for lifeline units” under Sections 35 and 37, as well as the First Schedule (9) of Act 870.
“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 1 January 2024, in line with Sectio35 and 37 and the First Schedule (9) of Act 870,” it said.
“ 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,” it added.
