Organised Labour suspends demonstration against 15 per cent electricity VAT

The leadership of Organised Labour has rescinded its decision to embark on a nationwide demonstration against the implementation of a 15 per cent Value Added Tax (VAT) on electricity consumption. 

This follows the government’s directive to the Electricity Company of Ghana (ECG) and the Northern Electricity Distribution Company (NEDCo) on Wednesday, February 7, to suspend the implementation and communicating same to Organised Labour.

The demonstration by the umbrella body of both public and private sector labour unions in the country, including the Trades Union Congress (TUC) and its 21 affiliate unions, was to take place next week Wednesday. 

Dr Anthony Yaw Baah, Secretary General, TUC, announced Organised Labour’s halt of the labour action at a press conference in Accra on Friday, February 9.

“On 7th February, 2024, government announced the suspension of the implementation of VAT on electricity consumption by residential customers. The leadership of Organised Labour has received a formal letter from the Ministry of Finance informing us of the new directive,” he said.

“We would, therefore, like to inform our members that the planned demonstration scheduled for 13th February, 2024, has been suspended until further notice,” Dr Baah said.

However, the unionist indicated that they would relentlessly work to ensure that no government implemented the 15 per cent VAT on electricity, which has been in the country’s VAT Act for the past 11 years.

“Even though we’re suspending our action on the 13th of February, we still have work to do because Act 870 is still there. What we need to do is to get this Act repealed. If we don’t, today, they’ve suspended it, but tomorrow, they’ll still use it,” he said.

“So far as the Ministry of Finance has communicated to ECG and NEDCo and to us that it’s suspended the implementation pending further engagement, we’ve also suspended our action.

“That pending further engagement, we’re not interested in it,” said, Mad Perpetual Ofori-Ampofo, President, Ghana Registered Nurses and Midwives Association, said in an interview with the Ghana News Agency.

“If they resume the implementation in anyway, we’ll also resume our action. So far as the VAT is imbedded in Act 870, we’ll target and see how we can remove that aspect from the Act,” she added.

Mr Isaac Bampoe Addo, Executive Secretary, Civil and Local Government Staff Association (CLOGSAG) backed Organised Labour’s call to have the first Schedule (9) of the VAT Act (Act 870) annulled.

“The fight has not ended; that law must be repealed and Parliamentarians must hear us that it’s a bad law. We want to make sure that no government goes back to it,” he stated.

The Ministry of Finance directed ECG and NEDCo to start the implementation of a 15 per cent VAT, effective January 1.

The tax is applicable to residential customers of electricity above the maximum consumption of level specified for block charges for lifeline units.

Source: GNA

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