15% VAT ON ELECTRICITY: REDUCE 3,681 PRESIDENTIAL STAFFERS TO SAVE COST – Franklin Cudjoe

Cudjoe’s suggestion comes on the back of reports that the government is set to engage in discussions with the International Monetary Fund (IMF) to find a consensus on compensatory measures for the anticipated revenue shortfall resulting from the decision to scrap the VAT on electricity.

The government had proposed a 15% VAT on electricity leading to labour and trades union agitations

A letter from the Ministry of Finance, signed by the sector minister, Ken Ofori-Atta, and dated December 12, 2023, directed the Electricity Company of Ghana (ECG) and the Northern Electricity Distribution Company (NEDCo) to implement the VAT on electricity for residential customers.

Portions of the letter asked the two power distributors to start “implementation of VAT for residential customers of electricity above the maximum consumption of level specified for block charges for lifeline units in line with section 35 and 37 and first schedule of VAT Act, 2013 (Act 870) effective 1st January, 2024.”

The minister had explained in the letter that the measure was part of the government’s medium-term revenue strategy and the International Monetary Fund (IMF) supported post COVID-19 programme for economic growth.

But Franklin Cudjoe believes reducing the list of Presidential Staffers and tax exemptions could help save cost.

“Just reduce expenditure and cut back 6bn out of the estimated 12 5bn promised tax exemptions to alleged politically favoured companies…. Please reduce the size of staffers at the presidency. From 953 staffers in 2017 to 3681 in 2024? Why? Are they running shifts at Jubilee?” he added.