The Ghana Union of Traders Association (GUTA) has kicked against the implementation of the Vehicle Emission levy and the proposed Value Added tax on electricity arguing the taxes will have an adverse economic impact on business.
In a signed statement, the President of GUTA, Dr Joseph Obeng said “the proposed VAT on electricity charges will directly impact businesses, particularly those heavily reliant on electricity for their operations. 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 Emissions Levy Act, 2023 (Act 1112) took effect on February 1, 2024, according to a statement released by the Ghana Revenue Authority (GRA). The government now requires Ghanaians to pay an annual levy for the carbon emissions produced by their petrol or diesel-powered vehicles. This started on 1st February 2024.
Over 20 Labour Unions including the Trade Union Congress have strongly opposed the implementation of the 15% VAT on ECG. The Trade Union’s Congress is threatening strike action on February 13 if the government fails to backtrack. The Secretary-General of the Trades Union Congress (TUC), Ghana, Dr Anthony Yaw Baah stated that the timing for the implementation is absolutely wrong.
“We are going to make sure we stop the implementation of this VAT. We are not talking about halfway what we are saying is that this law was passed in 2013 and no government has implemented it so there must be a reason,” he stated.
GUTA further stated that the introduction of these additional taxes will exacerbate the already high cost of doing business in the country.
The full statement reads.
“The Ghana Union of Traders Association (GUTA) strongly opposes the proposed implementation of Value Added Tax (VAT) on electricity charges and the imposition of an emission levy, due to the detrimental economic consequences it will have on businesses operating in Ghana.
GUTA firmly believes that the introduction of these additional costs will burden businesses, exacerbating the already high cost of doing business in the country.
The proposed VAT on electricity charges will directly impact businesses, particularly those heavily reliant on electricity for their operations. 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.
Furthermore, the implementation of the emission levy will further compound challenges in terms of double taxation and lack of electric vehicle infrastructure like charging stations and reliable sources of power.
Ghana already collects energy taxes, including petroleum tax on gasoline, diesel, kerosene and LPG.
GUTA urges the government to reconsider these measures 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.
GUTA encourages the government to explore alternative means of revenue generation that do not place undue burdens on businesses.”
Source: Ghana/Starrfm.com.gh/103.5FM/Prince Essien
