Government Suspends Implementation of VAT on Residential Electricity Consumption Amidst Stakeholder Engagements

In response to widespread concerns and following extensive deliberations with key stakeholders, the Ministry of Finance (MoF) has directed the Electricity Company of Ghana, Ltd (ECG) and the Northern Electricity Distribution Company (NEDCO) to suspend the implementation of the Value Added Tax (VAT) on electricity consumption by residential customers.

The decision comes in light of the MoF’s letter dated 12th December 2023, and the subsequent Press Statement issued on 30th January 2024, detailing the imposition of VAT on residential electricity consumption.

The Ministry acknowledges the importance of engaging with various stakeholders, particularly Organised Labour, to address concerns and foster a collaborative approach to finding sustainable solutions. The government is committed to exploring innovative, robust, and inclusive measures that will not only bridge the existing fiscal gap but also enhance economic resilience.

The suspension of the VAT directive is seen as a responsive move by the government to ensure that the concerns and perspectives of all relevant parties are considered before any further action is taken. This decision reflects a commitment to transparency, accountability, and the well-being of citizens.

As the government embarks on further consultations, it is anticipated that a comprehensive and balanced approach will be developed to address fiscal challenges without unduly burdening residential electricity consumers. The Ministry of Finance remains open to dialogue and constructive feedback from all stakeholders as it works towards a sustainable and equitable solution for all.