Amidst growing concerns from consumers, the Electricity Company of Ghana (ECG) has affirmed that it has not yet put into effect the Value-Added Tax (VAT) on residential electricity consumption exceeding lifeline units.
This clarification follows the Finance Minister, Ken Ofori Atta’s directive in a letter dated December 12, 2023, instructing the ECG and the Northern Electricity Distribution Company (NEDCO) to collaborate with the Ghana Revenue Authority (GRA) for the implementation of VAT on electricity usage above specified lifeline levels.
Although the implementation was slated to commence on January 1, 2024, in accordance with relevant sections of the Value Added Tax (VAT) Act, 2013 (ACT 870), the ECG has communicated that the order is not currently in force.
In a notice released on Monday, the company stated, “The Electricity Company of Ghana (ECG) Limited wishes to inform our cherished customers and the general public that the Value Added Tax (VAT) on residential electricity consumption above the lifeline category has not been implemented. All stakeholders should please take note.”
The proposed VAT measure has faced resistance from consumers who anticipate a significant surge in charges, expressing concerns about its potential impact on businesses and the overall cost of living in the country.
However, the Ministry of Finance remains firm in its stance, asserting that the implementation aligns with the government’s Medium-term strategy and the IMF-supported Post-COVID-19 Programme.