It’s not the right time to charge VAT on electricity – Ben Boakye
On January 14, 2024, 4:15 PM
The Executive Director of the Africa Centre for Energy Policy (ACEP), Ben Boakye has argued that the current economic conditions make it imprudent to impose a value-added tax (VAT) on electricity.
He highlighted the unresolved issue of electricity theft in Ghana.
Mr Boakye cautioned that implementing a VAT on electricity would escalate the burden on consumers and might prompt more individuals to resort to electricity theft.
“We don’t have the system to be able to address the leakages that are happening everywhere in the country.
“There is no money, so that additional tax on consumers who are about 30 to 35% of the total consuming populace, I don’t think it’s going to shift anything,” the ACEP boss indicated on Saturday, January 13.
He pointed out the need to focus on ensuring that consumers who are not paying for their electricity are held accountable.
According to Ben Boakye, the energy sector has the necessary systems in place to account for power generation and monitor usage.
He added that the energy sector needs to focus on optimizing tariffs and making sure that people are paying for the electricity they use.
Once these issues are addressed, the government can then consider introducing new taxes if necessary.
“How do we generate new revenue? Otherwise, you will only have a few credible consumers who are always taking the bullet, always taking the higher tariffs and that wouldn’t change anything at this point.”
