Asaase News sources close to the government have confirmed that cabinet, at a meeting held on Friday 2 February 2024, has unanimously agreed to drop the previously approved policy of charging 15% value added tax (VAT) on electricity.

This means that power consumers will no longer be required to pay the controversial 15% VAT on top of their bills.

The government has also agreed to initiate a conversation with the International Monetary Fund (IMF) to come to a consensus on how it can make up for the revenue shortfall occasioned by the decision to drop the VAT on electricity policy through additional spending cuts.

What is clear is that even though the proposal to charge 15% VAT on electricity was previously approved by cabinet, and also by Parliament, the reaction of the Trades Union Congress (TUC) and others to the proposed policy has led to a serious rethink and the decision to reverse it.

As to what the final decision on the policy will be, as in if it is to be completely scrapped, Asaase News sources familiar with the cabinet decision said that this will become clearer after engagements with the IMF.

“The position currently is that the 15% VAT on electricity is off, and it is likely it could either be off totally or significantly slashed,” the Asaase News sources said, on condition of anonymity

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