VAT on electricity is like being forced to swallow a bitter pill – ICU General Secretary

 

The General Secretary of the Industrial and Commercial Workers Union (ICU

), Morgan Ayawine, has asked the government to rescind its decision to charge a 15 percent value-added Value Added Tax (VAT) on electricity consumption beyond the lifeline threshold.

He said proceeding to implement such a policy would amount to forcing a bitter pill down the throats of the already suffering Ghanaian.

“We have been swallowing bitter pills. But this time around, the introduction of VAT on electricity can be described as something more than a bitter pill. Why do we have to pay VAT on electricity when the people are already overburdened?

We are all working as Ghanaians towards the recovery of our economy. And it is not the economy alone that we have to be looking at. The recovery of even the human being in this country should go along with the recovery of the country,” Mr Ayawine said when he addressed a news conference in Accra on January 24.

Earlier, the Trades Union Congress (TUC) issued a seven-day ultimatum to the government, by which deadline it should withdraw the imposition of value-added tax (VAT) on electricity.

The Secretary-General of TUC, Dr. Yaw Baah, said this policy would be detrimental to the livelihoods of ordinary Ghanaians.

Dr. Baah emphasised during a press conference that Ghanaians cannot bear the additional tax burden.

He therefore urged the government to cancel the implementation of the proposed tax.

Mr Ayawine said, “You will agree with me that ICU is part of organised labour. As the single largest union in the country, we share the position of organised labour in the matter at issue. Which is the government’s decision to put a tax on electricity. There are so many taxes in this country; we are counting and will continue to count. And the government is adding on. It is not right for the government to rather give its people bitter pills.”

He cautioned that the government would brew trouble if it went ahead and rolled out the tax policy.

“If there should be any trouble in this country, it is not the unions that will create trouble. I know in this country, anytime matters of this nature come up and the organised labour decides to agitate, they read all kinds of meanings. This matter is not a political issue. It is a common issue for every Ghanaian, including the working people of this country. I want to reiterate the organised labour position, of which we are part, that we are not going to sit aloof.

We are not jokers, and we mean business. After January 31st, if nothing is done about our demand for the withdrawal of the directive from these two organizations, ECG and NEDCO, we will advise ourselves appropriately. Already, today is January 24, 2024. We have started consulting our structures nationwide, and come January 31, 2004, we will join hands with our colleagues in organized labour to do what is appropriate,” Mr Ayawine warned.

It would be recalled that the Ministry of Finance announced that the implementation of the 15% Value Added Tax (VAT) for residential customers of electricity above the maximum consumption level specified for block charges for lifeline units has commenced.

The Ministry said this is in line with Sections 35 and 37 and the First Schedule (9) of the Value Added Tax (VAT) Act, 2013 (ACT 870).

The policy was scheduled to become operational on January 1, 2024. However, with one week until the end of January, the policy has not been implemented.

Speaking in an interview on Accra-based Joy News, the Managing Director of the Electricity Company of Ghana, Samuel Dubik Mahama, said, “If this policy were implemented this year, it would have been implemented by now.”