Timing For VAT Introduction On Electricity Wrong – Energy Expert1 min read

Energy expert, Kwadwo Nsafoah Poku has bemoaned government’s timing in introducing Value Added Tax (VAT) on electricity.

His regret follows government’s instruction to the Ghana Revenue Authority (GRA) to collaborate with the Electricity Company of Ghana (ECG) and the Northern Electricity Distribution Company (NEDCO) to implement VAT on households that exceed the lifeline power consumption.

Finance Minister Ken Ofori-Atta’s directive, effective January 1, 2024, aims to transfer VAT generated from consumers surpassing the specified maximum consumption level for lifeline units.

In an interview, Mr Poku expressed the view that while taxes may be necessary to address the energy crisis, imposing them all at the beginning of the year, especially alongside various other taxes, is not ideal.

“I think the timing is wrong. It is a wrong time to introduce more VAT on electricity at this stage,” he said.

According to the energy expert, in as much as there is the cry for more money to be raised to fix the Electricity Company of Ghana and the energy sector, the implementation date should be reconsidered.

He believes there is a need for sensitisation around the VAT introduction on electricity, adding that there is a need to update ECG’s software.