Residential consumers of electricity exceeding the maximum construction level for lifeline are expected to pay 15% Value Added Tax (VAT) beginning January 1, 2024.
The directive from government was carried in a letter through the Finance Minister, Ken Offori-Atta to the Electricity Company of Ghana (ECG) and the Northern Electricity Distribution Company (NEDCO) to what it says, “raise revenue as part of COVID-19 recovery programme”.
Adding more light to the directive, Deputy Finance Minister, Andrew Agyapa Mercer explained that though the decision is difficult for the government, it has a responsibility of offsetting debts owed the Independent Power Producers (IPPs).
He stated that as of July, 2023, government was indebted to the IPPs to the tune of GHS 1.7 billion which is needed to be settled.
However, Director of Operations at DALEX FINANCE, Joe Jackson, has described the move by government as harsh on domestic electricity consumers.
Similarly, Chief Executive Officer of the Consumer Protection Agency, Kofi Kapito, sees the decision as absurd.
