Editorial by Ghanaian Times: Use dialogue to resolve 15% electricity VAT matter

On Tuesday, the Trade Union Congress (TUC) gave the government a seven-day ultimatum to with­draw a 15-per cent Value Added Tax (VAT) it has planned to charge on electricity consumed by a category of domestic customers.

According to the TUC, it has sighted a circular originating from the Ministry of Finance, dated December 12, 2023, and signed by the sector minister, Mr. Kenneth Ofori-Atta, direct­ing the Electricity Company of Ghana and Northern Electricity Distribution Company to start the implementation of VAT for residential customers using electricity above the maximum consumption level specified for block charges for lifeline units in line with Sections 35 and 37 and first schedule (9) of (VAT) Act, 2013 (Act 870).

The implementation is ef­fective January 1, 2024, which means barring the unexpected, the specified customers would have their electricity bill in­creased by the 15 percent VAT charges.

Seeing this as exploitative and regressive, because the tax will reduce the purchasing power of consumers or increase the cost of living, the TUC has asked the government to withdraw the letter and stop the two power distributors from carrying out the directive or the Congress would advise itself.

The TUC basically seeks the welfare of workers and since workers labour for the progress of society, it also stands up against anything that will hurt society and, for that reason, calls for changes that can benefit the worker and the society as a whole.

We think this role qualifies the TUC to make certain moves like the current one, especially as the VAT charges will not affect only organised labour but others, most of whom are people who earn a living.

We also think even though the government is right in its action, the TUC action is a way of demanding accountability and fairness from the govern­ment in a matter relating to power, a sector very critical to the whole country,

But for the move by the TUC, the government’s action would have happened on the blind side of many of the affected power consumers.

On a daily basis, many power consumers complain about inflated or overcharged bills and so we believe that all increases in utility bills must be made known and well explained to the public.

It is good to have such public education so that all the stake­holders or their representatives can offer their input in one way or another.

Even protests like that of the TUC are based on reasons that can be useful after all.

Much as many would com­mend the TUC for its move, we believe in all matters, dialogue is always better than threats and violence.

Therefore, the TUC should choose dialogue over the threat that it will advise itself if the government does not withdraw the letter and, thus stop the implementation of its directive by January 31.

If such threats become the norm in the country, every rec­ognised group or organisation can find occasion to oppose the actions of the government if they do not sit well with them.

The implications then would be dire, so such threats and ulti­matums must be the last resort.

We cannot always attribute sinister motives to government actions; where even the sinister motive is clear, we should find a way to make the government acknowledge it before being forced to find the remedy to its move.

It is our hope that calm would reign in this matter and consen­sus between the government and the TUC would resolve it.