15% VAT on electricity, emission levy will lead to job losses — GUTA

Dr. Joseph Obeng, president of the Ghana Union of Traders Association (GUTA)

The Ghana Union of Traders Association (GUTA) has warned that the government's plans to impose value-added tax (VAT) on electricity charges and introduce an emission levy could lead to job losses in Ghana.

In a statement on Sunday, February 4, GUTA argued that the proposed VAT on electricity will directly impact businesses that rely heavily on electricity.

“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," the Group noted.

They added that the emission levy would "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, noted GUTA.

GUTA has urged government to reconsider the taxes 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," the business union stated.

The group encouraged exploring alternative revenue sources that do not place undue burdens on businesses.

Meanwhile, reports confirm that Cabinet has decided to withdraw the controversial 15% VAT on electricity subject to further talks with the IMF.

The move comes amid mounting pressure from labor groups and other stakeholders, with the TUC planning a demonstration against the measure on February 13.