Prof. Stephen Adei criticizes new VAT on domestic electricity consumption

Prof. Stephen Adei, former Board Chair of the Ghana Revenue Authority (GRA), has vehemently opposed the recent imposition of Value Added Tax (VAT) on domestic electricity consumption.

His criticisms resonate with concerns about exacerbating consumer hardships and undermining business competitiveness.

Speaking candidly on Joy News, Prof. Adei articulated his reservations, asserting that the government’s directive to levy VAT on domestic electricity consumption is fundamentally misguided.

He contends that such a fiscal measure would compound the challenges faced by consumers and undermine the competitiveness of businesses operating within the Ghanaian economic landscape.

Highlighting alternative avenues for revenue generation, Prof. Adei emphasized the urgency of prioritizing measures aimed at bolstering production and targeting significant sources of uncollected revenue.

He pointedly criticized the preferential treatment accorded to certain sectors, such as mining, highlighting the substantial exemptions enjoyed by these entities as a more viable target for fiscal scrutiny.

Concurrently, the Africa Centre for Energy Policy (ACEP) has reignited discussions surrounding the privatization of the Electricity Company of Ghana (ECG). The renewed debate underscores mounting concerns regarding the efficacy of state-controlled regulation and the impending challenges posed by potential power shortages.

Ben Boakye, the Executive Director of ACEP, articulated concerns surrounding the looming power cuts precipitated by the closure of the West African Gas pipeline in Takoradi. Mr Boakye’s assertions underscore a broader narrative advocating for structural reforms within Ghana’s energy sector, emphasizing the imperative for privatization as a mechanism to enhance regulatory oversight and operational efficiency.

The divergent perspectives articulated by Prof. Stephen Adei and stakeholders such as the Africa Centre for Energy Policy illuminate the multifaceted challenges confronting Ghana’s energy and fiscal landscapes. As debates surrounding VAT imposition and ECG privatization intensify, policymakers face a pivotal juncture, necessitating informed, strategic decisions that prioritize economic stability, consumer welfare, and sustainable growth. Balancing fiscal imperatives with social considerations remains paramount, underscoring the complexities inherent in navigating Ghana’s evolving economic paradigm.