Energy expert, Kojo Opoku has reacted to government’s decision to impose a 15 percent Value Added Tax (VAT) on electricity consumption.
Speaking on Adom FM’s morning show, Dwaso Nsem, Wednesday, Mr. Opoku said completely removing the tax might not be the best approach.
Instead, he recommended reducing it to 7 percent, stressing the need for careful consideration.
“I will not advocate for the scrapping of the levy completely, but let’s look at the law and review the percentage to help all of us” he urged.
The energy expert underscored the need to generate revenue to address energy sector challenges.
Although Mr. Opoku acknowledged that there are various options available to the government, he urged caution in decision-making.
“We need accountability to ensure that the money supports us with some developmental works in the country. The government does not receive free money. With decreases in VAT on electricity in some years to come, it can be reviewed,” he said.
Going forward, Mr. Opoku proposed a reassessment of the law by Parliament to reduce the tax to at least 7 percent.
The Finance Minister, Ken Ofori-Atta, issued a directive on January 1 instructing the Electricity Company of Ghana (ECG) and the Northern Electricity Distribution Company (NEDCO) to implement the VAT. The move aimed to generate revenue for the COVID-19 recovery program.
However, the Trade Union Congress (TUC) issued a seven-day ultimatum for the government to withdraw the tax, citing its adverse effects on the livelihoods of ordinary Ghanaians, especially pensioners and low-income earners.
The TUC warned that, if the government fails to revoke the tax imposition, Organized Labour would “advise itself and take action.”
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