15% VAT On Electricity Is Harsh – Joe Jackson.
Joe Jackson, Director of Business Operations at Dalex Finance, has criticized the government’s proposal to levy a 15% Value Added Tax (VAT) on certain electricity consumers.
He called the measure “harsh” and noted that it unfairly affects low-income households.
Finance Minister Ken Ofori-Atta directed the Electricity Company of Ghana (ECG) and the Northern Electricity Distribution Company (NEDCO) to levy VAT on residential customers who exceeded the maximum usage threshold for lifeline units in a letter dated January 1.
Mr. Jackson contended that the current lifeline barrier, set below GH¢50, is too low to adequately protect disadvantaged consumers.
“Don’t be deceived by the fact that the tax comes after the lifeline,” Mr. Jackson told Selorm Adonoo on Eyewitness News. “The lifeline is so thin that it hardly makes a difference. This effectively increases your electricity price by more than 20%, which is unfair to low-income households.”
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While accepting the government’s need for more cash, Mr. Jackson recommended alternative measures to address the issues.
“The government does need money, and that is undeniable since we are facing a cost crisis, and any new indirect tax will disproportionately affect the poor over the rich, so it is insufficient. The overall 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.”
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