"Greater Accra Organized Labor Opposes 15% VAT on Electricity: Threatens Strike Action

The imposition of a 15 per cent Value Added Tax (VAT) on electricity consumption for residential customers in the Greater Accra Region has led to significant opposition from organized labor groups. The Greater Accra Region's organized labor, led by Chairperson Patrick Benyemi, vehemently opposes the VAT, demanding its complete and unconditional withdrawal. They emphasize their unwillingness to engage in any discussions until this demand is met.

In response to the government's failure to withdraw the VAT, organized labor has threatened industrial action, planning to lay down their tools starting next Tuesday. This action aims to pressure the government into reconsidering its decision.

Mr. Benyemi highlighted several concerns regarding the VAT imposition:

• He described the policy as regressive, suggesting that it would disproportionately burden low-income families and threaten the economic stability of the nation.
• Organized labor argues that electricity is a basic necessity rather than a luxury, essential for daily life and economic productivity. Taxing it would exacerbate inequality and widen the gap between different socio-economic groups.

The government introduced the VAT on electricity consumption as part of its efforts to raise revenue for COVID-19 recovery and to meet conditions set by the International Monetary Fund (IMF). This decision was communicated through a letter from Finance Minister Ken Ofori-Atta to relevant agencies at the start of the year.

Earlier, the national leadership of organized labor, represented by the Trades Union Congress (TUC) Secretary General Dr. Yaw Baah, issued a one-week ultimatum to the government to withdraw the VAT. The government initially suspended the directive for further engagement after organized labor announced plans for strike action.

The situation underscores the tensions between government revenue generation efforts and the concerns of organized labor regarding the impact on citizens, particularly low-income households. Further dialogue and negotiation between the government and labor groups will likely be necessary to resolve the impasse.