The Ghana Union of Traders Associations (GUTA) says businesses are likely to lay off workers if the Value Added Tax (VAT) on electricity charges and the imposition of an Emission Levy are implemented.
GUTA states that these levies will lead to reduced production capacity resulting in layoffs and eventual collapse of the businesses.
The union says that their opposition to the levies is due to the detrimental economic consequences they will have on businesses operating in Ghana. GUTA said it firmly believes that the introduction of these additional costs will burden businesses, exacerbating the already high cost of doing business in the country.
“The proposed VAT on electricity charges will directly impact businesses, particularly those heavily reliant on electricity for their operations. Such businesses will face increased financial strain, which could potentially lead to reduced production capacity, layoffs, and even business closures and ultimately impede economic progress and dampen job creation opportunities.
“Furthermore, the implementation of the emission levy will further compound challenges in terms of double taxation and lack of electric vehicles infrastructure like charging stations and reliable source of power. Ghana already collects energy taxes, including petroleum tax on gasoline, diesel, kerosene and LPG.
GUTA urges the government to reconsider these measures and engage in thorough consultations with key stakeholders, including the business community, before implementing any new taxation policies. It is crucial that the voices and concerns of businesses are heard and taken into account to ensure policies that do not hinder economic growth and investment. GUTA encourages the government to explore alternative means of revenue generation that do not place undue burdens on businesses the union said in a statement on Sunday February 4.
Meanwhile, cabinet has decided to withdraw the controversial 15% VAT on electricity subject to further engagement with the IMF, TV3 Sources can confirm.
TV3’s sources are very close to Cabinet.
Government justified the imposition of the tax as a measure to raise revenue to clear the energy sector debt in a bid to boost the viability of the sector.
However, TV3 understands government may have been forced to backtrack due to the mounting pressure from Labour and other stakeholders. A demonstration has been planned the Trade Union Congress on February 13 against the measure.
By Laud Nartey
