In a post on social media site X, the creator of the Movement For Change stated that, given Ghanaians’ current hardships, it was not a good time for the government to burden them with more levies.
“In the kind of economic situation we find ourselves, every government policy, plan or decision, has to have the objective of achieving the following; reduce the cost of living, reduce the cost of doing business, reduce exchange rate, and create sustainable jobs for the youth” the former minister said.
Adding VAT to electricity will not achieve any of the above. “It would rather worsen the plight of the ordinary Ghanaian,” Mr Kyerematen stated.
The previous Trade and Industry Minister stated that his Great Transformational Plan (GTP) “as a trusted roadmap, would guide us to achieve the above objectives and more.”
Several groups and people have opposed the VAT on electricity, with the Trades Union Congress (TUC) imposing a seven-day deadline to the government to remove the levy.
Dr. Yaw Baah, General Secretary of TUC, emphasised the negative impact of this action on ordinary Ghanaians’ livelihoods, particularly retirees and those with low incomes.
During a news conference on Tuesday, January 23, Dr. Baah stated that the country’s destitute inhabitants cannot pay the increased tax burden.
He urged the government and its institutions to halt the implementation of the planned tax.
“It’s always the poor people in this country, including pensioners, who bear the brunt. And we should not allow that to continue. Organised Labour, we have come together and our message to the government is very simple, we cannot pay VAT on electricity.
“We will not pay it today or tomorrow. Organised Labour is demanding the immediate withdrawal of the letter, and another directive from the Finance Minister to Ghana Grid Company (GRIDCo), ECG to stop the implementation of the VAT on electricity. We are giving the government, up to January 31, 2024, to withdraw the letter,” Dr Yaw Baah said.
He emphasised that they would take the necessary action if the Finance Minister does not instruct GRIDCo and ECG to retract the letter.
“If by that time the Minister of Finance fails to give directive to GRIDCO and ECG, we will advise ourselves,” he said.
In a letter dated January 1, Finance Minister Ken Ofori-Atta authorised the Electricity Company of Ghana (ECG) and the Northern Electricity Distribution Company (NEDCO) to apply the VAT in order to generate income for the COVID-19 recovery project.
The administration has explained the rationale for imposing a 15% VAT on energy use.
This move is part of the government’s COVID-19 recovery plan, which aims to create more money.
Agyapa Mercer, the Deputy Energy Minister, stated in a media interview on Monday, January 15, that while it was a difficult decision, it was important to satisfy debts owed to independent power producers.
“Obviously, if you look at the scope of the tax and what it is intended to do—raise revenue to meet some obligations of the government in the energy sector—it will interest you to know that, as we speak, as of July 2023, the amount of money that we owe to the IPPs alone is in the region of GH¢1.7 billion”
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