Joe Jackson, Director of Business Operations at Dalex Finance has criticised the government’s decision to impose a 15% Value Added Tax (VAT) on specific electricity consumers. He described the move as “harsh” and argued that it disproportionately burdens low-income families.
A January 1st letter from Finance Minister Ken Ofori-Atta instructed the Electricity Company of Ghana (ECG) and the Northern Electricity Distribution Company (NEDCO) to apply the VAT to residential customers exceeding the maximum consumption level for lifeline units. However, Mr. Jackson argued that the current lifeline threshold, set below GH¢50, is too low to effectively shield vulnerable consumers.
“Don’t be deceived by the fact that the tax comes after the lifeline,” Mr. Jackson emphasized in an interview with Selorm Adonoo on Eyewitness News. “The lifeline is so low that it barely makes a difference. This effectively translates to over 20% added to your electricity bill, and that’s harsh for struggling families.”
While acknowledging the government’s need for additional revenue, Mr. Jackson urged alternative approaches to deal with the issues. “The government does need money and that is not in dispute because we have crises of cost on our hands and any tax that comes again and is an indirect tax will hurt the poor more than the rich and so it is not enough. The general population is suffering.
“I go for the government raising more money but I am always insisting that that has to be done through direct tax and not through indirect tax at a time when the general population is suffering.”
By: Kabah Atawoge
