‘Make Electricity VAT Suspension Permanent’

Morgan Ayawine


Organised Labour has cautioned the government not to reintroduce the suspended 15% Value Added Tax (VAT) on electricity following the directive by the Finance Ministry to put the levy on hold pending further engagements with relevant stakeholders.

According to the Industrial and Commercial Workers Union (ICU), the Organised Labour demands to withdraw the 15% VAT imposed on consumption which applies to residential customers exceeding the maximum consumption level of lifeline units, led to the government suspending it pending further review.

Speaking in an interview with the media, General Secretary, ICU-Ghana, Morgan Ayawine, said the union on several occasions have called on the government to withdraw the VAT on electricity only for it to direct the Electricity Company of Ghana (ECG) and the Northern Electricity Distribution Company (NEDCo) to suspend the implementation of the VAT on electricity for consumers.

Morgan Ayawine further indicated that the government’s ability to suspend the VAT informed their decision to also suspend the demonstrations, indicating that in the event where government tries to ‘play smart’, “then we would come back again and this time around, mobilise our people to hit the streets”.

He also added that, “if the government thinks that they can play a smart one on us, we are still there. We are still alive, we can bounce back. But the fact that we have also not made a statement or taken a position to go back and discuss or engage government on the arrangement on this VAT, does not mean that it is gone and gone forever”.

Strike Suspension 

Organised labour, including the Trades Union Congress (TUC), cancelled its planned demonstration scheduled for February 13, 2024.

The demonstration was initially slated in protest against the government’s implementation of a 15 per cent value-added tax (VAT) on electricity.

This follows the directive by the Ministry of Finance on February 7 instructing the Electricity Company of Ghana (ECG) and the Northern Electricity Distribution Company (NEDCo) to suspend the implementation of the tax measure.

This move aims to provide an opportunity for the government to engage in further discussions with key stakeholders regarding the VAT on electricity.

During a press conference on Friday, February 9, Dr. Anthony Yaw Baah, General Secretary of the TUC, stated, “We gave the government until January 31st to withdraw the letter and warned authorities that if by that time the Minister of Finance had not given the directive to stop the VAT, we would advise ourselves.”

However, on February 7, the government formally announced the suspension of the VAT on electricity consumption, which was communicated to the organised labour in a formal letter.

As a result, the planned demonstration on February 13 has been suspended.

BY Prince Fiifi Yorke