The Electricity Company of Ghana(ECG) has announced that the Value Added Tax(VAT) on residential electricity consumption above the lifeline category has not been implemented.
The company in a statement dated January 22, 2024, admonished all stakeholders to comply with the previous payment model.
The yet-to-be-implemented VAT on electricity consumption according to the government would be used to clear off debts owed to independent power producers.
It will be recalled that the Finance Minister, Ken Ofori-Atta in a letter dated January 1, instructed the Electricity Company of Ghana (ECG) and the Northern Electricity Distribution Company (NEDCO) to apply a VAT to residential customers exceeding the maximum consumption level for lifeline units.
The controversial 15 percent VAT imposed on electricity consumption is one of the government’s COVID-19 recovery programs aimed at generating revenue for the state.
The decision to tax residential electricity consumption has faced backlash from some well-known individuals in the country.
Prof. Emeritus Stephen Adei, a renowned Ghanaian economist and former Board Chair of the Ghana Revenue Authority (GRA) says the newly-introduced tax will worsen the plight of consumers and make businesses uncompetitive due to the current economic status of the nation.
Meanwhile, the Africa Centre for Energy Policy has reignited the debate for the privatization of ECG to enable the government to regulate power distribution effectively.
This follows concerns of massive power cuts in the coming days as many power plants have been shut down due to the closure of the West African Gas pipeline in Takoradi.
The Executive Director of ACEP, Ben Boakye said many consumers are not paying for the power they’re consuming because ECG is state-controlled.
Since the beginning of the year, there have been power outages in most parts of the country.
However, the Deputy Energy Minister, Andrew Egyapa Mercer, has noted that the power cuts experienced in recent times have been resolved.
Find the notice from ECG below
