15% VAT on electricity redrawn by Government


The Cabinet has unanimously decided to reverse the previously approved policy of imposing a 15% value-added tax (VAT) on electricity, marking a significant milestone.

This decision lifts the burden on consumers, sparing them from the controversial levy added to their electricity bills.


In response to strong opposition from the governing party, industry stakeholders, and the general public, who argued that the policy would exacerbate financial strains on families and businesses amid challenging economic conditions, the Cabinet conducted a thorough review. Taking public opinion into account, the Cabinet arrived at this unanimous decision.

The removal of the 15% power VAT showcases the government’s responsiveness to citizens’ concerns.


This decision is expected to bring relief to consumers, particularly those in lower- and middle-class households, who often bear the brunt of such tax increases.

Additionally, the administration has taken a proactive approach by announcing its intention to engage in discussions with the International Monetary Fund (IMF) to address potential revenue shortfalls.


This reflects the government’s commitment to sound financial management. To tackle the revenue implications of eliminating the energy VAT, the government plans to consult with an international financial institution, such as the IMF, for potential solutions and guidance.

Discussions with the IMF will focus on identifying new revenue streams and ensuring financial stability for the nation’s economic future. This approach allows the government to explore viable alternatives for compensating any shortfall resulting from the removal of the electricity value-added tax.


While more details about the talks with the IMF are pending, the administration remains steadfast in its dedication to safeguarding the nation’s and its residents’ financial well-being. The government aims to pursue fair solutions that benefit the entire country, emphasizing transparent communication and collaboration with other nations.


Source: Omanghana.com

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