Home / BUSINESS / Govt charging VAT on electricity since January 1; finance minister letter shows

Govt charging VAT on electricity since January 1; finance minister letter shows

A letter from the Ministry of Finance has showed that the government has been changing Value Added Tax (VAT) on a section of electricity consumers in the country.

The letter, which was signed by the Minister for Finance, Ken Ofori-Atta, and addressed to the Electricity Company of Ghana (ECG) and the Northern Electricity Distribution Company (NEDCO), indicated that the VAT would be for residential customers of electricity above the maximum consumption level specified for block charges for lifeline units.

It added that VAT forms part of the implementation of the country’s Covid-29 recovery program and should be charged starting from January 1, 2024

“As part of the implementation of the Government’s Medium-Term Revenue Strategy and the IMF-Supported Post Covid-19 Program for Economic Growth (PC-PEG), the implementation of VAT for residential customers of electricity above the maximum consumption level specified for block charges for lifeline units in line with Section 35 and 37 and the First Schedule (9) of Value Added Tax (VAT) Act, 2013 (ACT 870) has been scheduled for implementation, effective 1st January 2024.

It added, “For the avoidance of doubt, VAT is still exempt for “a supply to a dwelling of electricity up to a maximum consumption level specified for block charges for lifeline units” in line with Section 35 and 37 and the First Schedule (9) of Act 870,” part of the letter which is dated December 12, 2023, reads.

The minister, in the letter, stated that the ECG and NEDCO to put measures in place and collaborate with the Ghana Revenue Authority (GRA) to ensure that the implementation of the VAT starts on January 1.

“The Electricity Company of Ghana (ECG) and the Northern Electricity Distribution Company (NEDCO) are, hereby, requested to liaise with the Ghana Revenue Authority (GRA) to ensure that the implementation of VAT for residential customers of electricity above the maximum consumption level specified for block charges for lifeline units takes effect on 1st January 2024, in line with Sectio35 and 37 and the First Schedule (9) of Act 870.”

Read full letter below

Source: Ghanaweb.com

About Clement Blankson

Check Also

Bolt Food Reaffirms Commitment to the Ghanaian Market Amidst Glovo’s Exit

  Bolt Food, leading delivery platform in Ghana reaffirms unwavering commitment to its customers in …

Embracing Africapitalism: Path to Sustainable Development and Economic Empowerment

    By: Tony O. Elumelu CFR, Founder, Tony Elumelu Foundation; Chairman, UBA Group   …