Bussiness
Cedi fall affected ECG; tariffs will certainly go up – ACEP
Executive Director of the Africa Centre for Energy Policy (ACEP), Benjamin Boakye has mentioned that he doesn’t see how electrical energy fees will not be elevated.
He cited the detrimental impression of the Cedi depreciation in opposition to the foremost buying and selling forex particularly the greenback as one of many causes for the tariffs to be elevated.
Speaking on the proposal by the Electricity Company of Ghana (ECG) to the Public Utilities Regulatory Commission (PURC) for upward tariff adjustment, on TV3’sNews 360, Mr Boakye mentioned ” First of all, these are proposals and as is all the time finished, when there’s a main tariff announcement, the utilities will make proposals and PURC will look at the proposals to do additional engagements with stakeholders and decide what the optimum tariffs can be. From the place we sit we do nit see why the tariff wouldn’t go up.
“If you take a look at the final tariff changes and also you low cost that by simply the depreciation of the Cedi, a lot of the funds are made in {dollars}, that alone, the present tariff has obtained about 32 per cent worth.
“That of course, would require that we recover the lost value. Beyond that, the under recoveries of ECG for 2021 was almost 50 per cent of their entre revenue requirement, which means that we need to find ways to recover how much they need to actually survive.”
He added “We needed government to pay ¢1.25 billion dollars just in 2021 to be able to offset the underrecoveries in the space. If you combine that in 2020 under recoveries we are talking of ¢14billion of interventions from the government. That money was far more than we spent on education, infrastructure , in road infrastructure, agriculture infrastructure. we cannot continue to get that support from government when ECG needs to improve its efficiency given the right tariff for them to be able to reduce their reliance on government.”
The administration of the ECG has made a proposal to the PURC to extend electrical energy tariffs by up to 148 per cent masking 2019 to 2022.
The state energy distributor additionally proposed a mean enhance of seven.6% in tariff over the subsequent 4 years to cowl Distribution Service Charges (DSC).
The attributed the excessive enhance within the Distribution Service Charges
“The results of ECG’s tariff proposal for the subsequent 5 years reveals an roughly 148% enhance on the present DSC1 in 2022 and a mean enhance of seven.6% yr on yr from 2023 to 2026.
“The high increase in the DSC1 for year 2022 could be attributed to the gap that has developed over the years between the actual cost recovery tariff and the PURC approved tariffs as well as the cost of completed projects”.
“Similarly, ECG’s proposed DSC2 shows a higher increase of 28.4% in first year (2022) while that of the subsequent years’ increases by an average of 2% from 2022 to 2026”, it added.
The administration of ECG additionally indicated that its monetary sustainability is vital because it impacts on your complete vitality sector.
“The financial sustainability of the Electricity Company of Ghana is important as it impacts on the entire energy sector. With the huge investment needs facing the distribution industry over the next five years, it is expected that the proposed tariff increases would inevitably be approved to sustain efficient and reliable electricity service.”
“Over the next five years, the DSC will need to increase consistently (average of 7.6%) to cover distribution cost. It is expected that the approved BGC would correspond with the commercial terms of PPAs (Power Plant Agreements)”, it added.
By Laud Nartey|3news.com|Ghana
Bussiness
Ghana’s GDP shows economy is fast recovering despite DDEP – Finance Ministry
Ghana’s Gross Domestic Product (GDP) indicates a rapid economic recovery despite global challenges and ongoing debt restructuring, according to the Ministry of Finance (MoF).
The Ministry in a statement today indicated that latest data from the Ghana Statistical Service (GSS), cumulative economic growth for the second quarter (Q2) of 2024 reached 6.9%, a notable increase from the 4.7% recorded in the first quarter of 2024.
The MoF statement further noted that, “The economy’s robust recovery is in response to the macroeconomic stability and growth interventions that government is pursuing under our IMF-supported Post Covid-19 Programme for Economic Growth (PC-PEG).”
According to them, the overall real GDP growth for the first half of 2024 rebounded strongly, with year-on-year GDP growth averaging 5.8% for the period, significantly higher than the 2.9% recorded in the same period in 2023.
By Edem Mensah-Tsotorme
Read full statement below
Bussiness
Facebook, Youtube, online trading companies must be taxed – Deputy Finance Minister
The Deputy Finance Minister Dr Alex Ampaabeng, has proposed that online trading companies should be taxed to bolster the economy.
He noted that these companies, both local and international, generate significant revenue from their Ghanaian clients, which underscores the necessity for taxation.
In an interview with Bernard Avle on Channel One TV’s The Point of View, Dr Ampaabeng pointed out various potential revenue sources for Ghana, including online businesses and content creation companies.
He questioned why other national companies operating in Ghana are taxed, but social media platforms like Youtube and Facebook, which run numerous advertisements, are not included in the Ghanaian tax system.
According to him, these social media companies earn profits from the advertisements they display, and online trading companies also generate income from the sale of their products and services.
He mentioned online trading companies such as Jiji, Jumia, and Tonaton, which he believes surpass all physical marketplaces in Ghana in size.
According to him, “I can’t think of a country which has not gotten a digital service tax system of some sort, so Ghana is long overdue. Just to make an example so that people will appreciate where I’m coming from. Go to Youtube and play a video, within one or two minutes, you are going to watch about two, or three adverts.”
“What it tells you is that Facebook or Youtube is making profits right here in Ghana. Go to your Facebook account, and you are going to see a number of adverts on your right, left. What it is telling you is that Facebook is making profits right here in Ghana and not being taxed. Meanwhile, there are companies operating in Ghana, for jurisdiction reasons, of course, that are being taxed,” he said.
The Deputy Minister added that “So then, it comes to the question of the application of our tax laws. Revenues generated in Ghana are subject to taxes. We have Facebook, TikTok and all those players, these are digital platform owners.”
He stressed, “Then we have the digital or market players, here we are talking about individuals who are using the digital platforms. We have Jiji, Jumia, Tonaton, these combined, are bigger than all physical marketplaces in Ghana. And it tells you the volume of transactions, that are going on there.”
He expressed his hope that individuals earning online profits from Ghanaian residents would be taxed.
“There are conversations ongoing, I wouldn’t want to pre-empt anything, maybe in the future, it might not be anytime soon, what I would like to see, is a Ghana where people who are earning all forms of profits in the country are subject to taxes. People who are trading online to Ghanaian residents, people who are generating revenue from Ghana are allowed to pay taxes,” he noted.
Additionally, he proposed a collaboration with the government to curb cybercrime by registering and verifying these online trading companies.
“We can have a system where the government engages these operators, so individuals will submit their Ghana Card and are registered and verified,”he concluded.
Source: Citinewsroom.com
