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Government to discontinue tax on electricity


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Government to discontinue tax on electricity
Grenada prime minister, Dickon Mitchell - FP

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St George’s – The Grenada government said on Tuesday it had taken a decision to discontinue the 25 per cent non-fuel charge associated with electricity supply by the island’s lone power company.

Prime Minister and Minister of Finance, Dickon Mitchell said the company had been losing “significant revenue” because of the measure.

Speaking at the weekly post-Cabinet news conference, Mitchell told reporters that the state-owned Grenada Electricity Company (GRENLEC) had accumulated EC $16 million (U.S. $5.925 million) in losses as of September 12.

The initiative had been put in place by the previous administration to cushion the impact of increased global energy prices.

“That has had a very negative impact on the cash flow of GRENLEC, and on its ability to meet its commitments as they fall due,” the prime minister said. “In the circumstances, this particular aspect of the stimulus package, as difficult as the decision is, is not sustainable.”

Mitchell said his administration cannot risk jeopardising the financial stability of the electricity company continuing with this part of the stimulus package.

“So, the discount will be discontinued (and) based on GRENLEC’s billing cycle … the impact if any, will probably be felt around November of this year,” he said. “We, however, are going to look at alternative measures to cushion the impact, particularly for customers who consume less than or up to 100 kilowatt hours per month.”

The prime minister said the statistics provided by GRENLEC suggested that there were 15 000 households and small businesses to be affected “and so we will look to see what measures can be taken from the government’s perspective to cushion the impact…”

“We are hopeful that if the fuel prices for electricity continue to trend downwards that eventually we will also see a downward trend in the cost of electricity,” he said, adding that his administration is mindful of the cries from consumers about the high cost of the product.

“But we also have to be honest with the population (and) to a large extent the cost of electricity is determined by the price of fuel, and we all know that worldwide the price of fuel has gone up significantly partly because of the Russia-Ukraine war.”

(CMC)