A former presidential staffer in the John Mahama administration has expressed scepticism regarding reports that government has cancelled the 15% Value Added Tax (VAT) on electricity.
Stan Dogbe believes the move might be an attempt by government to thwart the Trade Union Congress’ planned demonstration against the tax measure.
In a press release issued on Monday, February 5, he advises caution among Ghanaians in taking the Akufo-Addo government’s promises seriously.
He insists that failure to heed his caution might lead to significant disappointment.
“The decision to reverse the previously approved policy of charging 15% value-added tax (VAT)
on electricity comes just days before the Trades Union Congress (TUC) planned demonstration on February 13.”
“The TUC and other labour organisations had vowed to hold a nationwide protest to push the government to withdraw the directive to implement the 15% VAT charge on residential electricity consumption.
There has reportedly been a unanimous decision at a Cabinet meeting on Friday, February 2, to abandon the previously sanctioned policy of imposing a 15% Value Added Tax (VAT) on electricity.
According to Asaase Radio, this implies that electricity consumers will no longer be obligated to pay the contentious 15% VAT on top of their utility bills.
In response to the negative reception of the proposed policy by entities such as the Trade Union Congress (TUC), despite its prior approval by both the Cabinet and Parliament, the government has opted to reassess its stance and reverse the decision.
Furthermore, the government has agreed to engage in discussions with the International Monetary Fund (IMF) to reach a consensus on compensating for the anticipated revenue shortfall resulting from the abandonment of the VAT on electricity policy.
“It is hard to believe that the sudden decision change is not just a strategic move to thwart the TUC’s planned demonstration. Will there be a withdrawal after labour cancels their nationwide demonstration?”
The resolution to address this deficit may involve additional spending cuts.
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