The Ghana Union of Traders Association (GUTA) has commended the government for suspending the implementation of the 15 percent VAT on electricity consumption by residential customers.

President of the Association, Dr. Joseph Obeng, says the suspension was a step in the right direction.

The introduction of VAT, he asserted, was a terrible idea and could have impacted negatively on businesses.

The government has suspended the implementation of the 15 percent VAT on electricity consumption by residential customers.

This was contained in a statement issued by the Ministry of Finance.

It explained that the suspension had become necessary to enable the government to engage key stakeholders, particularly organised labour, on the matter.

The Ministry was optimistic that the engagements would birth innovative, robust, and inclusive approaches to bridging the existing fiscal gap while bolstering economic resilience.

It has therefore written to the Electricity Company of Ghana and the Northern Electricity Distribution Company to suspend the implementation of the programme.

In the Ministry of Finance’s press statement, it pledged that “extensive dialogue will be held with organised labour and all stakeholders, including ECG and NEDCO, to exercise restraint to facilitate a constructive dialogue towards a quick resolution of the impasse.”

Dr. Obeng said in an interview with Rainbowradioonline.com that the suspension is a great idea and the planned engagement was laudable.

“The government had planned to implement the VAT, but it has suspended it, and that is positive. Whatever it is, they had planned to implement it, and it has been suspended. That means it plans to engage with us. The engagement is good because, after the negotiations, we could reach a point where we may agree or call for a reduction or total scrap of the VAT.

"As business owners, we do not need new taxes. The taxes we pay already are enough, and any new taxes could affect the business community. We are currently on our way to the restoration of the economy.

"We are now recording good indicators. The policy rate is decreasing. We now have the stability of the currency, so why do you want to trigger it with new taxes or another cost of doing business? It doesn’t make sense,” he added.