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Government Cancels 15% VAT on Electricity – Reports

The government has cancelled directives to impose a 15% Valued Added Tax on electricity, according to many reports.

Cabinet is reported to have unanimously taken that decision on Friday, to either drop the tax in totality or reduce it.

While the government had earlier defended the introduction of the tax as part of measures under the International Monetary Fund (IMF)-supported programme, it is without a doubt that the now withdrawn directive is a response to pressure from organised labour.

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Labour unions on Friday announced intended strikes over the implementation of the tax.

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With the tax now dropped, the government is set to meet with the IMF to reach an agreement on other revenue measures in lieu of the anticipated revenue shortfall.

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