Finance Ministry to engage stakeholders over VAT on electricity

The Ministry of Finance believes it would need to hold extensive discussions with organised labour on the proposed VAT on electricity for residential consumers in order to gain their acceptance.

In a statement last week, organised labour gave the government a seven-day ultimatum to rescind any plans to charge the tax, stating it would worsen the plight of workers.

Several groups and civil society have also called on the government to back down on the controversial tax.

However, in a statement on January 30, 2024, the Finance Ministry said it would still need to engage with key stakeholders, including organised labour, to get them to agree to the tax.

It therefore appealed for restraint pending the engagements.

“The Ministry of Finance has noted the concerns of organised labour on the implementation of VAT on consumption of electricity by residential customers. Extensive dialogue will be held with organised labour and other key stakeholders in the coming weeks to ensure stakeholder buy-in.”

“The Ministry therefore appeals to organised labour and all stakeholders, including ECG and NEDCO, to exercise restraint to facilitate a constructive dialogue towards a quick resolution of the impasse,” the statement said.

Below is the statement from the Finance Ministry