Consumers of electricity power in Ghana will from next month pay extra 17.5 percent on their bills as new taxes are added to the billing elements.
The Ghana Revenue Authority (GRA), last week, tasked the Electricity Company of Ghana (ECG) to charge Value Added Tax, (VAT) and others on domestic consumers. The new tax and levies include; VAT of 12.5%, GETFUND Levy of 2.5% and NHIL Levy of 2.5%.
This has been a surprise to many Ghanaians including financial, tax and economic experts as this is the first time VAT is to be charged on a basic necessity like electricity. Also, this comes at a time government has promised to take part of electricity consumption bill from Ghanaians to ameliorate the hardship impact of the COVID-19 lockdown.
“This is absolutely cold blooded, insensitive, and ill-considered”, financial expert, Alex Mould has fumed. He expatiated that, “On one hand you (government) claim to have given the Ghanaian people a 3-month 50% tariff waiver; and then you slap us at the same time with new taxes to increase our bills.”
Consequently, the Minority in Parliament is demanding the immediate withdrawal of the new tax and levies on electricity as it warns of dire consequences on domestic consumers.
Addressing the media in Parliament, the minority spokesperson on Mines and Energy, Adam Mutawakilu, accused the president of giving 50 perfect rebates to consumers with one hand and taking it back with another.
The Damango MP warned that both consumers and ECG will be worse off with the move.
“That means that you will pay more for electricity, it will deny you from the food that you buy because you have to do your scale of preference and consumers will be burdened the more…so this 50 per cent was just to deceive Ghanaians, so you gave it to Ghanaians with one hand and then you take it with another hand.”
The decision to impose VAT on electricity for consumers comes a month after the President reduced electricity consumption by 50 per cent to commercial and domestic consumers and free lifeline consumers.