Gov’t considers reintroducing VAT on electricity – Report

The Ghanaian government is considering reinstating the 15% value-added tax (VAT) on residential electricity as inflation continues to decline.

Inflation dropped to 20.9% in July, the lowest in 28 months, prompting the International Monetary Fund (IMF) to note the government's readiness to reintroduce the tax.

The VAT, initially introduced as part of an IMF-backed COVID-19 recovery program, was suspended in February 2024 following public backlash.

To address the resulting GH¢1.8 billion revenue shortfall, the government is exploring alternative revenue sources, including taxing the foreign incomes of resident Ghanaians.