Executive Director of African Centre for Energy Policy (ACEP), Benjamin Boakye, has said less number of Ghanaians within the lifeline target will benefit from the exemption of government’s 15 percent Value Added Tax on electricity.
The Finance Ministry had earlier announced the imposition of a Value Added Tax (VAT) on a specific section of electricity consumers indicating that it will apply to residential electricity customers who consume above the maximum consumption level specified for block charges for lifeline units.
The lifeline consumers per the Public Utilities Regulatory Commission (PURC) covers consumers whose consumption is 30 kilowatt per month.
However, speaking in an interview on Ghana Tonight, Tuesday, January 23, Mr. Boakye explained that more Ghanaians consume electricity above the lifeline target, hence just about five percent of lifeline consumers will benefit from the exemption.
He said government’s lifeline target will only exempt the poor and vulnerable who usually consume less than 30kilowatt in a month.
“The question then is how many people will actually consume that low amount of electricity. A lot of people consume more electricity. From the analysis that we have done in the past, if you look at the total targeted population who are not being taxed, but at this point were about 30 percent.
“So, you look at domestic consumers and small businesses that are not actually registered as businesses so that population is already not big and out of that very few falls within the lifeline bracket, so you can safely say that 25 percent more people will be taxed leaving just about 5 percent within the lifeline bracket,” he noted.
He added that “the lifeline structure also is already problematic because targeting has become a challenge where you have many people on a compound using one metre.
Mr. Boakye had already expressed fears the Electricity Company of Ghana will engage in ‘discretionary abuse’ of taxes collected following the implementation of the 15% Value Added Tax (VAT) on electricity consumption.
Commenting on this on his X platform, Mr Benjamin Boakye said “Your haircut will not be the same in 2024. Meanwhile, only a few honest ones Will pay their bill, and ECG will discretionary abuse whatever is collected.”
