Challenges in Implementing VAT on Electricity: ECG Boss Admits Nightmare for Prepaid Customers

• The Managing Director of the Electricity Company of Ghana (ECG) admits that implementing the 15% VAT on electricity consumption will be a technical nightmare.
• He raises concerns about charging the VAT through ECG’s billing and collection systems, especially for prepaid customers.
• For prepaid customers, the consumption will only be known at the end of the day, making it difficult to charge the VAT on consumption.
• Prepaid customers will have a debt that needs to be settled to account for the VAT on the electricity used.
• The ECG boss emphasizes the need for stakeholder engagement to address the technical hurdles of tracking consumption and charging VAT in real-time.
• While the finance ministry has directed ECG to start implementing the VAT from January 2024, more discussions are needed due to the “bottlenecks” in applying the tax through ECG’s billing systems.

Source: modernghana.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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