Utility Tariff Hikes Blunt VAT Relief as TUC, PURC Seek Common Ground
As Ghanaian workers begin to feel modest relief from recent VAT adjustments, rising electricity and water tariffs are emerging as a fresh pressure point, threatening to erode any gains from tax easing and deepen cost-of-living concerns.
Against this backdrop, the Trades Union Congress (TUC) and the Public Utilities Regulatory Commission (PURC) have agreed to sustain dialogue over the impact of the 2026–2030 Multi-Year Tariff Order (MYTO), which takes effect today January 1, 2026. The understanding follows meetings held on December 11 and 30, 2025, focused on how the new utility tariffs are affecting household budgets, workers’ welfare and the stability of the power and water sectors.
While organised labour has acknowledged some marginal relief from VAT changes, the TUC warned that higher utility bills risk offsetting those benefits, particularly for low- and middle-income earners. The Congress said it will closely monitor how the tariff adjustments are influencing wages, disposable income and overall living standards, with the findings expected to shape its next course of action.
The PURC, however, maintained that reversing the tariff decision would undermine the Commission’s independence and weaken the financial sustainability of the energy and water sectors, with broader implications for the economy. The regulator stressed that the adjustments are critical to maintaining electricity reliability, improving water access and supporting much-needed investment in infrastructure.
At the same time, the Commission acknowledged the concerns raised by labour and committed to addressing them during the next tariff review window. The TUC also indicated it would engage government on current wage levels, arguing that salaries have not kept pace with rising utility costs despite recent tax relief measures.
Both institutions underscored the need for continued collaboration to strike a balance between affordability and sector stability, noting that without careful calibration, higher utility tariffs could quickly cancel out the modest breathing space created by VAT relief for Ghanaian workers.
