The International Monetary Fund (IMF) has expressed readiness to explore alternative measures to address Ghana’s revenue shortfall following the suspension of the Value-Added Tax (VAT) on electricity.
In response to concerns raised about the tax’s impact on households and businesses, IMF Managing Director Kristalina Georgieva assured collaborative efforts with Ghanaian authorities to find a mutually beneficial solution. She emphasized the Fund’s sensitivity to public sentiment surrounding the issue and its commitment to bridging the debt gap while consolidating economic gains.
During a meeting with selected journalists in Ghana, Georgieva underscored the importance of strengthening the government’s fiscal position while acknowledging the challenges faced by low-income households. She highlighted the potential adoption of different measures to achieve fiscal objectives effectively.
The Government of Ghana suspended the planned 15 percent VAT on domestic electricity consumption in February, following instructions from the Ministry of Finance. The decision aimed to facilitate extensive dialogue with industry players and labor unions, with further discussions with the IMF to ensure economic recovery post-COVID-19.
Georgieva reiterated the ongoing discussions between the IMF and Ghanaian authorities, emphasizing the need for the government to explore internal strategies for debt and fiscal sustainability. She affirmed the IMF’s commitment to assisting Ghana in achieving these objectives through collaborative efforts.
Source: Ghanaweb