Burdening workers with taxes unfair – TUC on 15% VAT on electricity

Deputy General Secretary of the Trades Union Congress (TUC), Joshua Ansah, has described as unfair government's decision to impose a 15% Value Added Tax (VAT) on electricity consumption.

According to him, there are other ways government can generate revenue to settle its compounding energy sector debts instead of burdening Ghanaians who are already suffering amidst the economic hardships.

Speaking in an interview on Citi FM's Eyewitness News, Mr Ansah said workers would resist the introduction of the 15% VAT on electricity for Ghanaians to heave a sigh of relief.

The TUC deputy general secretary stated that, “Organized labour will advise itself, and unions will do what unions often do when an unpopular decision or tax is introduced that affects workers...VAT is not the only thing the government can do to bring back the lights. I don’t think that is the only way the government can take to make the electricity supply stable when a lot of the population is suffering. This is not fair, and that is why workers are resisting it with all their might.”

“If you are bringing additional taxes or VAT, then it is an easy way for the government. There are other ways the government can use to raise revenue, and it must work harder. To be burdening workers every day is not fair,” he added.

The TUC had earlier given government a seven-day ultimatum to withdraw the tax, citing its detrimental impact on the livelihoods of Ghanaians, particularly pensioners and low-income earners.

His comment comes after government, through the Minister of Finance, Ken Ofori-Atta directed the Electricity Company of Ghana (ECG) and the Northern Electricity Distribution Company (NEDCO) in a letter to implement a 15% VAT on electricity consumption effective January 1, 2024.

He explained that the tax aimed to raise revenue for the COVID-19 recovery programme.

The letter said the VAT will apply to residential electricity customers above the maximum consumption level specified for block charges for lifeline units.

The implementation of VAT for residential customers of electricity is in line with Sections 35 and 37 and the First Schedule (9) of the Value Added Tax (VAT) Act, 2013 (ACT 870).

SA/NOQ

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