The Ghanaian Cabinet has decided to retract the 15% Value Added Tax (VAT) on electricity in response to widespread public outcry and threats of nationwide industrial action. Sources close to Cabinet have confirmed the decision and indicated that further engagement with the International Monetary Fund (IMF) is necessary.
The imposition of the 15% VAT on electricity has been met with strong opposition from Organised Labour, civil society groups, and various sections of Ghanaian society. Organised Labour has threatened a nationwide industrial strike if the tax is not rescinded.
Political figures have also weighed in on the issue, with National Democratic Congress candidate John Mahama condemning the tax for exacerbating the hardships faced by Ghanaians. The National Organizer of the New Patriotic Party (NPP), Henry Nana Boakye, acknowledged the tax’s negative impact on the government’s popularity, particularly in an election year, affirming the party’s stance on the matter.
The decision to withdraw the VAT on electricity reveals the significance of public sentiment and the potential socio-political ramifications of unpopular fiscal policies.