In a recent revelation, Minority Leader Dr Ato Forson has brought to light a concerning development regarding the cost of electricity in Ghana. Since 2013, successive governments had refrained from imposing Value Added Tax (VAT) on domestic electricity consumption, a decision made with the welfare of the citizens in mind. However, the current Akufo-Addo/Bawumia government seems to have diverged from this path, introducing a VAT on domestic electricity consumption that amounts to a staggering 21.9% increase in electricity prices.
The Finance Minister’s statement discloses that this increment comprises a 15% VAT, a 2.5% GetFund levy, a 2.5% National Health Insurance Levy (NHIL), and an additional 1% Covid levy. Notably, this VAT on domestic electricity consumption is considered a final tax, leaving consumers without the possibility of reclaiming VAT as domestic consumers are not VAT registered.
What is particularly alarming is that this significant hike in electricity prices comes at a time when the nation is grappling with a resurgence of power outages, commonly referred to as “dumsor.” Despite public concerns and frustrations, Dr Bawumia and the government have yet to acknowledge the severity of the situation, leaving citizens to brace themselves for the dual impact of increased electricity prices and intermittent power supply.
The irony lies in the fact that the Akufo-Addo/Bawumia government had initially promised to reduce electricity tariffs, a commitment that now appears to be overshadowed by a substantial surge in costs. Citizens are left questioning the government’s sincerity and the impact of such decisions on their daily lives.
As Ghanaians prepare for the economic ramifications of this unanticipated electricity price hike, it raises broader questions about the government’s economic policies and their implications for the average citizen. Dr Ato Forson’s revelation serves as a stark reminder that political promises can sometimes diverge from the reality faced by the people, leaving them to navigate through unforeseen economic challenges.