The Institute of Energy Security (IES) has asked the government to resource the Electricity Company of Ghana (ECG) effectively to increase revenue.
The Institute noted that resolving technical and commercial losses incurred by the Company would be ideal in raking in more revenue for the ECG’s operations than to introduce a tax handle.
The call follows government’s announcement of a 15 per cent Value Added Tax (VAT) on electricity consumption for residential customers exceeding the maximum consumption level for lifeline units.
Mr Andrew Agyapa Mercer, Deputy Energy Minister, has explained that the decision by government, though was a “difficult one”, was necessary to help clear off debts owed independent power producers.
In an interview with the Ghana News Agency, Nana Amoasi VII, Executive Director, IES said: “We must ensure that technical losses are brought down to the nearest minimum.”
“They [ECG] should look for the smart metres that are capable to communicate right, able to detect theft, and put in the right transformers and right cables in the distribution lines,” Nana Amoasi VII said.
On the implementation of policies, he noted that over the past few years the government had made and passed polices and regulations for the power sector by “always putting the cart before the horse”.
That, he explained was not a good way to have the buy-in of the populace, therefore, called on the government to engage the citizenry and be transparent with all stakeholders, and be receptive to alternative views to make the energy sector robust.
“It will be a smart thing for government to reverse this decision because it’s not going to help the sector, it is counter-productive,” the IES Executive Director said.
Unions, including the Trades Union Congress (TUC) and the Ghana Union of Traders Association (GUTA) have all opposed the implementation of the 15 per cent VAT on electricity, citing its adverse impact on the economy.
“GUTA firmly believes that the introduction of these additional costs will burden businesses, exacerbating the already high cost of doing business in the country,” said, Dr Joseph Obeng, President, GUTA.
Speaking on a local radio station, Mr Joshua Ansah, Deputy Secretary-General, TUC, said the VAT on electricity would exacerbate the socio-economic hardships of Ghanaians.
“The government has not informed us, neither have we met with them to officially tell us their intention to withdraw the tax. We only heard it on social media, and trust me, we will not rely on social media to make decisions,” he said.
He said the Union was still preparing to embark on its intended demonstration till it received official assurance form government on the withdrawal of the tax.
