Economist and former Board Chair of the Ghana Revenue Authority (GRA), Prof. Stephen Adei, is kicking against the newly introduced VAT on domestic electricity consumption.

He insists it will worsen the plight of consumers and make businesses uncompetitive. 

His comments come on the back of a government directive to the GRA to liaise with the Electricity Company of Ghana (ECG) and the Northern Electricity Distribution Company (NEDCO) to transfer Value Added Tax (VAT) generated from domestic consumers who exceed their lifeline power consumption effective January 1, 2024.

Reacting to the directive on Upfront on the Joy News channel, Prof. Adei stated that the government’s action is counterproductive and would hurt the country’s already battered economy.

“There’s no doubt at all people will be worse off. You’ll first focus on things that increase production and then that in turn will feed into your taxes. You should be going after the billions of uncollected property taxes and people getting away [inaudible], being exempted, not even the more important ones.

“The mines have millions of exemptions and these are the ones we should go after rather than going after the ordinary producer and consumer when it comes to electricity.”

Meanwhile, the Africa Centre for Energy Policy has reignited the debate for privatisation of ECG to enable government to regulate the power distributor effectively.

This follows concerns of massive power cuts in the coming days as many power plants have been shut down due to the closure of the West African Gas pipeline in Takoradi.

The Executive Director of ACEP, Ben Boakye said many consumers are not paying for the power they’re consuming because ECG is state controlled.