The Consumer Protection Agency (CPA) has expressed grave worry over the Ghanaian government’s recent tax increases, describing them as exorbitant and onerous on citizens.
Over 20 new taxes have been introduced this year alone, according to the Agency, creating a rising sense of “tax fatigue” among Ghanaians.
CPA CEO Kofi Kapito expressed his discontent with the government’s tax policies during an interview on Citi Breakfast Show.
He cited the recent Value Added Tax (VAT) on domestic electricity consumption as an example of the increasing tax burden.
“The consumer is tired,” Mr. Kapito stated. “This year alone, from the first of the year, there have been more than 20 taxes introduced. Cars now, if you register a vehicle, you’re forced to pay a 100 cedis for what? Insurance has gone up.”
On January 1, 2024, the government announced the application of a Value Added Tax (VAT) on a certain segment of the country’s power consumers.
The Minister of Finance, Ken Ofori-Atta, stated in a letter to the Electricity Company of Ghana (ECG) and the Northern Electricity Distribution Company (NEDCO), that the VAT will apply to residential electricity customers who exceed the maximum consumption level specified for block charges for lifeline units.
This change was implemented as part of the government’s Covid-19 recovery program on January 1, 2024.
The letter states that the application of VAT for residential electricity consumers is in accordance with Sections 35 and 37, as well as the First Schedule (9) of the Value Added Tax (VAT) Act, 2013 (ACT 870).
Through this program, the government hopes to create revenue and support the country’s Medium-Term Revenue Strategy as well as the IMF-supported Post-COVID-19 Program for Economic Growth (PC-PEG).
