Organised Labour suspends demo against 15% VAT on electricity

Following the suspension of a planned demonstration against the implementation of a 15 percent Value Added Tax (VAT) on electricity, Organised Labour has called off its protest against the tax measure of government.

Prior to this, various labour unions across the country had planned to proceed with the demonstration even after government said it was suspending the VAT to allow for further dialogue and buy-in from relevant stakeholders.

Organised Labour currently wants government to completely scrap the 15 percent Value Added Tax (VAT) on electricity as they believe it is counterproductive and will further burden its members, businesses and citizens.

Executive Secretary of the Trades Union Congress, Dr. Anthony Yaw Baah addressing a press briefing in Accra said the decision comes after government officially communicated the suspension of the VAT to the labour group.

The TUC boss however pointed that Organised Labour remained committed towards pushing against tax policies that were draconian and unfavorable.

In a press statement issued on February 7, 2024, the Finance Ministry directed the Electricity Company of Ghana (ECG) and the Northern Electricity Distribution Company (NEDCO) to put a hold on the levy pending further engagements with relevant stakeholders.

The Ministry of Finance explained that the suspension is to allow for extensive dialogue and the buy-in of industry players and labour unions who have expressed dire concerns over the decision to implement the tax measure and its potential effect on consumers and businesses across the country.

“On behalf of the government, the Ministry would like to inform ECG and NEDCO to suspend the implementation of the VAT directive pending further engagements with key stakeholders including organized labour”, parts of the statement read.

From January 1, 2024, the government directed implementing entities [ECG, NEDCo] to begin the imposition of a 15 percent levy on electricity customers above the maximum consumption level specified for block charges on lifeline units.

The move was, however, met with stiff opposition from labour unions, businesses, citizens, lawmakers and the general public.

The tax policy, according to government falls in line with the Medium-Term Revenue Strategy and the IMF-Supported Post-COVID-19 Program for Economic Growth (PC-PEG) which seeks to generate domestic revenue.