The imposition of a 15 percent Value Added Tax (VAT) on electricity consumption has been justified by the government as a crucial component of its COVID-19 recovery initiative aimed at generating additional revenue.

In a recent interview with Citi FM on Monday, January 15, Deputy Energy Minister Agyapa Mercer acknowledged the challenging nature of the decision but underscored its necessity in addressing debts owed to independent power producers.

Mercer highlighted that the outstanding debt to independent power producers alone amounted to approximately GH¢1.7 billion as of July 2023.

Despite this rationale, there is a growing chorus from the Minority and energy experts urging a reconsideration of the Value Added Tax imposed on specific categories of residential electricity consumers.

Finance Minister Ken Ofori-Atta, in a letter to the Public Utility Regulatory Commission, clarified that the value-added levy would apply to electricity consumption exceeding lifeline units.

The Ministry explained that this move is integral to the government's broader COVID-19 recovery program.