An industrialist and previous Board Chairman of the Electricity Company of Ghana (ECG), Mr Tony Oteng-Gyasi, has respected the ongoing addition in utility duties as a fundamental advance that would help support the specialist organizations and pad the business from running into more profound budgetary issues.
He told the Daily Graphic in a meeting that the levy increment was long past due, particularly coming when the nation had been attempting to adapt to expensive power buy understandings (PPAs) and the increasing expense of a generation of the utilities.
In the power division, Ghana’s expense of age, which is assessed at US$0.14 per kilowatt (kW), is said to be the most noteworthy in West Africa.
In the sub-area, it costs a normal of US$0.10 to create a kW of power.
Subsequently, Mr Oteng-Gyasi said “the propensity to censure” the addition in utility taxes must be estimated against the truth and the need to support the organizations from running into more profound money related difficulties.
“There is an expense of creating the power and the expense of delivering that power originates from the earliest starting point when you are producing force, and we are producing power at a pricey rate,” he said.
That, he stated, necessitated that shoppers paid sensible taxes to help keep the organizations in the business.
Effect on administrators
Thusly, Mr Oteng-Gyasi, who established and presently deals with the Tropical Cable and Conductor Limited, communicated the expectation that the augmentation would expand the budgetary places of the water and power specialist organizations and make it feasible for them to pay their specialist co-ops on schedule.
With state-claimed undertakings in the influence and water area being obligated to their providers, he said the expanded duties should make it workable for the organizations to gather more cash and have the option to respect their monetary commitments to their outsiders.
This should save the power and water retailing organizations of an obligation overhang, which has frequently been the worst thing about brief installment for administrations, the previous President of the Association of Ghana Industries (AGI) told the Daily Graphic in the meeting.
For quite a long time, the power division has been snared in a repetitive obligation circumstance where each player, from the top to the base, owes another for deferred installment.
Mr Oteng-Gyasi was addressing the paper on the impact points of the upward changes in power and water taxes.
On June 21 and June 24, the Public Utilities Regulatory Commission (PURC) reported that it had endorsed a 11.17 percent and 18.1 percent expansion in power and water duties separately compelling July 1.
The commission, which directs the utilities subsector, likewise reestablished a 10 percent toll for the GWCL to be utilized in running the Teshie Desalination Plant.
This implies from July 1, while clients of GWCL will pay 18.1 percent more for their water, clients of the Power Distribution Services (PDS), the Northern Electricity Distribution Company (NEDCo) and the Enclave Power Company Limited (EPC) will pay 11.17 percent more for the power they devour.
The augmentation in duty for power is intended to profit the PDS, ECG, Volta River Authority (VRA), the Ghana Grid Company Limited (GRIDCo) and EPC, which produce and supply power in the nation.
Rebate mechanical levy
Past supporting the tax changes, Mr Oteng-Gyasi likewise asked why mechanical purchasers would keep on paying a similar tax as private buyers.
He said the present tax structure where mechanical purchasers sponsored private buyers was the “most bizarre course of action”.
“In many spots, private rather finances mechanical for different reasons; modern is a mass devour; our power bill for example is around GH¢300,000 or GH¢400,000 per month,” he said in reference to the power bill of TCCL, a cabling maker.
“So if for anything by any means, for purchasing in mass, we ought to get an endowment.
“Be that as it may, on the off chance that we are not getting a sponsorship, for what reason should we need to finance private?” Mr Oteng-Gyasi inquired.
He said the expense of gathering bills from mechanical customers was additionally less expensive contrasted with that of private buyers, something that necessitated that the previous’ capacity cost to be financed by the last mentioned.
He said the nation’s capacity structure eventually made the expense of tasks of ventures high with unfriendly effect on the mechanical part of the economy.
“Power is a basic piece of any creation procedure and if simultaneously, our costs become high and individuals would prefer not to purchase and we begin bringing in things, at that point we need to lay off our work.
“In the event that we lay off our work, you know the social agitation since individuals lose wages, families endure and the entire nation endures,” he said.