TUC demands the withdrawal of VAT on electricity within 7-days

The Trades Union Congress (TUC) has issued a seven-day ultimatum to the government, demanding the withdrawal of the imposition of Value Added Tax (VAT) on electricity consumption beyond the lifeline threshold. The directive, dated January 1 and issued by Finance Minister Ken Ofori-Atta, instructed the Electricity Company of Ghana (ECG) and the Northern Electricity Distribution Company (NEDCO) to implement the VAT with the aim of generating revenue for the COVID-19 recovery program.

However, the TUC, led by Secretary-General Dr. Yaw Baah, strongly opposes this move, highlighting its adverse effects on the livelihoods of ordinary Ghanaians, especially pensioners and low-income earners. Dr. Baah, speaking at a press conference, emphasized the disproportionate impact on the less privileged in the country, including pensioners, and called for a reconsideration of the decision.

During the press conference, Dr. Baah conveyed a clear message to the government, stating, “It’s always the poor people in this country, including pensioners, who bear the brunt. And we should not allow that to continue. Organized Labor, we have come together, and our message to the government is very simple: we cannot pay VAT on electricity.”

The ultimatum from the TUC sets the stage for potential negotiations and discussions between the government and organized labor to address the concerns raised regarding the impact of VAT on electricity consumption on vulnerable segments of the population.

“We will not pay it today or tomorrow. Organised Labour is demanding the immediate withdrawal of the letter and another directive from the Finance Minister to Ghana Grid Company (GRIDCo), ECG, to stop the implementation of the VAT on electricity. We are giving the government up to January 31, 2024, to withdraw the letter,” Dr. Yaw Baah said.

He mentioned that they would take appropriate action if the finance minister did not instruct GRIDCo and ECG to retract the letter.

“If by that time the minister of finance fails to give directives to GRIDCO and ECG, we will advise ourselves,” he said.