Ghana puts power tax on hold after public outcry

Ghana's government has suspended plans to implement a 15% tax on power, following public outrage that it will worsen the cost-of-living crisis. The value-added tax (VAT) was to be levied on domestic electricity consumers. However, labour unions opposed the new tax and announced nationwide protests against it next week. Authorities now say the plan has been put on hold until talks are held to resolve the dispute.

Ghanaians are now required to pay an annual levy for the carbon emissions produced by their petrol or diesel-powered vehicles. Critics fear that the additional taxes could have a ripple effect on the struggling economy, further intensifying the cost-of-living crisis that has already pushed up the prices of necessities like fuel. The finance ministry directed the two main power distributors, Electricity Company of Ghana (ECG) and the Northern Electricity Distribution Company (NEDCO), to put the new levy on hold.

Trade unions argue that the introduction of additional taxes will burden families and companies, exacerbating the already high cost of doing business. They demand that the tax be dropped immediately. Ghana is currently going through its worst economic crisis in a generation, and the government is battling to increase its revenue.

The West African country has been experiencing power shortages, popularly known as "dumsor," which means on and off in the Akan language. The country has become heavily reliant on gas as a major source of energy for electricity generation, and any shortage in gas results in power outages.