Independent Power Producers (IPPs) in the country have called on government to review taxes and levies imposed on electricity to bring some relief to consumers.
According to the IPPs, the numerous levies slapped on electricity tariffs in Ghana has made the industry uncompetitive, over-burdening industry and households.
In a statement sighted by Citi Business News, the Chief Executive of the Chamber of Independent Power Producers, Distributors and Bulk Consumers (CIPDIB–Ghana), Elikplim Kwabla Apetorgbor, said the levies and taxes on electricity in Ghana have contributed to the high prices paid by Ghanaians compared to other countries in the sub-region.
He pointed out for example that, the addition of about 22.5% statutory levies and charges to the End User Tariff is the cause of high electricity bills in Ghana.
“This add-ons contribute significantly to the expensive electricity tariff consumers talk about. These levies and charges do not only create inconvenience and burden to consumers, but it also weakens our capacity for growth as a nation and renders our distribution companies uncompetitive,” he argued.
Breaking the levies down, Mr. Apetorgbor explained that these inessential taxes include GETFUND made up of 2.5%, NHIL of 2.5%, Value Added Tax of 12.5%, and Public Lighting – known as Street Lighting of 3%, as well as National Electrification bill of 2%.
Mr. Apetorgbor maintained that a “complete removal of these taxes and a reduction in gas price will make Ghana’s position as one of the benchmarks in the sub-region and bring visible economic relief to the country”.
“For us to see an evidence-based industry growth, we must, as a necessity, remove the Maximum Demand Charge and Power Factor Surcharges from the tariff applicable to industries and bulk consumers. The effect should translate into drastic reduction in the cost of production, prices of goods and services and eventually trigger the utilization of any “idle capacity”.
He was optimistic that “When by the Grace of God the country is out of the clutches of Covid-19 and begins efforts at revitalizing the economy, we must do so on the premise that industries require cheaper power for growth and job creation all of which translate into tax earnings for the country”.
He advised that the country will require very strategic interventions and workable solutions to quickly bring the economy to a sound footing.
“It must not be business as usual. We cannot tax ourselves out of the downturn. We must rather engineer deliberate growth at a faster pace to quickly bring relief to our people. The actions we take will inform the volume of foreign direct investments we are able to attract. Our policies especially in the energy sector will determine how quickly we recover from this shock,” he concluded.
Reduce electricity tariffs to reflect current production cost – CUTS Ghana to PURC
Meanwhile, a Research and Public Policy Think Tank, CUTS Ghana, has petitioned the Public Utilities Regulatory Commission (PURC), demanding a review of electricity tariffs for all classes of electricity consumers to reflect the current cost of generation in the electricity power mix.
“In the light of the falling prices of the key input fuel for power generation on the world market, it is fair and reasonable for the PURC to consider immediate review of electricity tariffs to give relief to businesses and consumers.”
