Analysis | Economy | HP News 10 | National15% VAT on electricity: Can government afford a withdrawal?Source: Caleb Ziblim & Isaac Kofi Agyei 6 February 2024 9:35pmIn a bold move to reshape the energy sector and alleviate debt burdens while ensuring a steady power supply for industries, the government has initiated a series of measures, including quarterly tariff increments.To align with the IMF’s revenue mobilization objectives, Ghana unveiled a comprehensive Medium-Term Revenue Strategy in September 2023.This strategic framework focuses on crucial tax policies and revenue administration measures essential for achieving both Ghana’s domestic goals and the IMF’s program revenue objectives.Watch video: JoyNews’ Isaac Kofi Agyei explains why Government of Ghana is introducing a 15% VAT of electricityGhana has already taken significant strides towards enhancing revenue generation, implementing measures such as quarterly adjustments to electricity tariffs, raising the VAT rate from 12.5% to 15%, restructuring the E-levy, and eliminating discounts on customs benchmark values.Looking ahead to 2024, the government plans to introduce additional measures, encompassing 12 tax reforms and the implementation of new tax mechanisms.One of the pivotal strategies involves the removal of selected VAT exemptions, amounting to approximately GHS4.4 billion this year.
