Don't panic, 15% VAT on electricity not implemented yet - ECG boss to Ghanaians

Mr Dubik Mahama, Managing Director for the Electricity Company of Ghana (ECG), has clarified that the new Value Added Tax (VAT) on electricity consumers beyond the lifeline threshold is not being charged yet, despite the issuance of the order for its implementation.

The Finance Minister, Ken Ofori Atta ordered the ECG and the Northern Electricity Distribution Company (NEDCO) to charge 15% Value Added Tax on electricity.

The notice, however, has drawn a massive outcry by the Labour Unions of the Trade Union Congress (TUC) leading to the issuance of a one week ultimatum for the withdrawal of the imposition of the VAT.

Dr. Anthony Yaw Baah, Secretary General of the TUC at a press conference, vehemently opposed the move, citing its detrimental impact on the living conditions of ordinary Ghanaians, particularly pensioners and low-income earners.

Speaking on the Citi Breakfast show, the ECG boss assured Ghanaians and all ECG consumers not to panic because the ECG has not started implementing the 15% deductions.

".....the reason for the delay in deductions to legal and operational challenges associated with the implementation of the new tax....ECG is still in discussion with the Public Utilities Regulatory Commission (PURC) over the implementation of the VAT....It is on record, we have not implemented it, and we are not charging it”.

"There are some difficulties that have to be checked with the law so I don’t think that it is time for people to panic, it is not panic mode yet. All of these things have to be cleared out…so the collection has not started, it is still a conversation going on”, Mr. Mahama added.

The ECG MD further added, “If a letter doesn’t belong to you and you take and read it, you will attempt to see it in a certain light but those of us whom the letter was meant for our consumption, we understood the letter and we have applied it accordingly, so I can say on authority that it hasn’t been charged, it is a conversation being had, it might even reach a point where the whole law will be looked at and recrafted.”