Ghana's Minister of Energy and Petroleum, Emmanuel Armah-Kofi Buah

Ghana’s Minister of Energy and Petroleum, Emmanuel Armah-Kofi Buah

Ghanaians are singing the blues under John Mahama’s Better Ghana agenda. Nationals who twisted their mouths trying to echo the ‘ Ede Bi Keke’ slogan of the then presidential candidate of the National Democratic Congress (NDC) all the way to the polls, are now turning their heads in anger at the tax, tax and tax again policies of the John Dramani Mahama administration.Fuel prices have been hiked for only what God knows, all in the name of removing subsidies, which appear to be recurring all the time. As the nationals were brooding over these tax burdens, the government slapped taxes on agricultural and fishing inputs.

In what has become known as the fishing nets and cutlass tax, the government has indirectly decided to punish the rural poor. The controversy over the talk tax, under which the ordinary Ghanaian would pick up extra bills for receiving calls from brothers and sisters abroad, is still raging.

In the midst of all these, the nationals have been hard hit with another scary policy, as the government continues to implement austerity measures to try and arrest the fallen economy.

The next destination in the regime of tax and tax is the upward adjustment of electricity tariffs in a more secretive manner.

Though there have not been any additions as far as the unit price is concerned, The Chronicle can authoritatively report that the government has withdrawn subsidies on electricity tariffs, with effect from June this year.

For the uninitiated in economic jargons, the simple explanation is that the amount the government was previously paying for consumers has been added onto the total cost of power consumption. If you buy power, take it from The Chronicle , the government does not pay a pesewa more for the consumer.

For instance, if a consumer was billed GH¢20 for electricity tariff for the month of May, because the government paid GH¢5 as subsidy, that consumer would be required to pay GH¢15. With the introduction of the new policy, consumers are required to pay the GH¢5 in addition to the cost of power billed, making one pay for the full price of power consumed.

This policy is reflective on post-paid consumers who received their June bill for power consumed. With those on pre-paid meters, the indication is that they are paying more than what they were previously paying.

Austerity measures
The policy comes in the midst of public agitations against the government’s austerity measures in widening of the tax net to cover certain products and items at the points of entry.

Early this month, Parliament approved a request by the government to approve a number of levels agreed upon by Parliament to enable it generate some revenue to support shortfalls in this year’s budget.

The National Fiscal Stabilisation Levy and the Special Import Levy Bills were approved by the House.

The National Fiscal Stabilisation Levy Bill re-imposed a stabilisation levy of five percent on profit before tax of selected companies and institutions for a period of eighteen months. The exercise is expected to generate GH¢88 million to cushion the Ghanaian economy.

The Special Import Levy Bill, on the other hand, seeks to impose a special import levy on selected imported goods, including condoms, mobile phones and accessories, outboard motors, fishing nets, agricultural machinery, dairy milking products, energy saving bulbs, book binding machines, cutlasses and some farming inputs at the points of entry. That measure is also expected to generate GH¢208 million over the remaining six months of the year.

In addition to the above, the Communications Service Tax (Amendment) Bill was also passed, enjoining the Minister of Finance to work in collaboration with the Minister of Communications to establish a monitoring mechanism to verify the actual revenue that accrues to service providers, for the purpose of computing taxes due the government.

What has left many wondering as to whether the government was sensitive or insensitive to their plight, was the manner in which the power adjustment has been made.

PURC to review tariff for electricity & water
In May this year, the Public Utilities Regulatory Commission (PURC) announced plans to begin the process of reviewing tariffs for electricity generation and water, following a request made by the service providers, the Ghana Water Company Limited (GWCL) and the Electricity Company of Ghana (ECG).

As a first step, the Commission said it would interrogate the proposal brought forth by the utility service providers, after which they (service providers) would be requested to publish key highlights of their proposals in the media for the public to comment and contribute their views on.

Such publication, the PURC noted, would entail a chronological account of revenue that were accrued to them from the 2010 – 2011 tariff adjustment, and how it was utilised for the benefit of the consumer; Key challenges and strategies to address them, in order to improve upon quality of service; Reasons for new tariffs requests, intended revenue to be generated in the short to medium term, percentage increase being requested for and; how they are going to address concerns of consumers in respect to efficiency improvements and quality of service issues during the nationwide public engagements on quality of service.

In addition to the above, the PURC said there would also be a stakeholder consultation process, where the service providers, with the commission as an intermediary, would be given the opportunity to present their case to key stakeholders.

But, before the PURC would take a decision based on the data it had collected from key stakeholders in the above-mentioned exercise, the ECG had gone ahead to withdraw the government’s subsidy without alerting its consumers.


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