Addressing a news conference in Accra yesterday, the Greater Accra Chairperson, Patrick Benyemi, stressed that “organised labour’s position is a total and unconditional withdrawal of the 15 per cent VAT and not suspension of it”.

He said if the government failed to heed the demand, members of organised labour would lay down their tools next Tuesday to drum home their demand.

Mr Benyemi explained that the implementation of the VAT would aggravate the plight of the already overburdened population.

“We, as Greater Accra organised labour, associate ourselves with the demands of our national leaders and thereby emphasise that we cannot pay VAT on electricity.

“We will not pay it today; we will not pay it tomorrow. Organised labour in the Greater Accra Region of Ghana unequivocally opposes this decision to impose a 15 per cent VAT on electricity consumption,” he said.

Regression

Describing the policy as a regressive one, he said it would threaten the livelihoods of hardworking Ghanaians and undermine the nation's economic stability.

“Imposition of this awkward, bad and nuisance VAT on electricity, a basic necessity for households and businesses alike, will unreasonably burden already struggling citizens.

“Low-income families will be hit the hardest as they are forced to allocate a larger portion of their income to cover essential electricity bills,” Mr Benyemi added.

Electricity, he said, was not a luxury but a fundamental utility essential for everyday life and economic productivity and added that taxing it would only exacerbate inequality and widen the gap between the wealthy and the vulnerable in our society.

Background

The government directed the relevant agencies to begin the implementation of the 15 per cent VAT on domestic consumption of electricity at the start of the year to raise revenue as part of its COVID-19 recovery efforts and as part of conditions to satisfy the government’s latest programme with the International Monetary Fund.

In a letter dated January 1, 2024, the Finance Minister, Ken Ofori-Atta, instructed the Electricity Company of Ghana (ECG) and the Northern Electricity Distribution Company (NEDCO) to apply the VAT to residential customers exceeding the maximum consumption level for lifeline units.

But in January this year, the national leadership of organised labour, led by the Secretary General of the Trades Union Congress (TUC), Dr Yaw Baah, gave the government a one-week ultimatum to withdraw the VAT on electricity for residential customers.

He said the implementation of the VAT on residential customers would worsen the plight of already burdened Ghanaians since the cost of electricity would go up by 15 per cent.

This month, organised labour announced that its members would lay down their tools on February 13, but the government has since suspended the directive for further engagement.