Economist and former Board Chair of the Ghana Revenue Authority (GRA), Prof. Stephen Adei has kicked against the implementation of Value Added Tax (VAT) on the supply of electricity above the lifeline for residential purposes.
According to him, government should rather go after billions of uncollected property tax if it wants to increase revenue mobilisation.
Speaking to Joy News, Prof. Stephen Adei recommended that government should focus on taxing the mining sector rather than giving many exemptions and going after ordinary consumers to pay more for electricity.
“There’s no doubt at all people will be worse off. You’ll first focus on things that increase production and then that in turn will feed into your taxes. You should be going after the billions of uncollected property taxes and people getting away [inaudible], being exempted, not even the more important ones.
“The mines have millions of exemptions and these are the ones we should go after rather than going after the ordinary producer and consumer when it comes to electricity,” Prof. Stephen Adei said.
Government on Wednesday announced that as part of the implementation of the Government's Medium-Term Revenue Strategy and the IMF-Supported Post Covid-19 Programme for Economic Growth (PC-PEG), the implementation of VAT for residential customers of electricity above the maximum consumption level specified for block charges for lifeline units in line with Section 35 and 37 and the First Schedule (9) of Value Added Tax (VAT) Act, 2013 (ACT 870) has been scheduled for implementation, effective January 15.
The VAT is still exempt for "a supply to a dwelling of electricity up to a maximum consumption level specified for block charges for lifeline units" in line with Section 35 and 37 and the First Schedule (9) of Act 870.