Outrage As PHED Effects 7.5% VAT On January Bills

Outrage as PHED effects 7.5% VAT increase on January bills

Electricity consumers in Port Harcourt, Rivers State and other states covered by Port Harcourt Electricity (PHED) have raised the alarm over the “fraudulent 7.5% value-added tax” perceived in January accounts.

It was concluded that, although the electricity company stated that VAT charges on the January invoice were 5%, a closer analysis revealed that it was based on the new 7.5% rate that took effect from February.

Our investigations revealed that thousands of consumers could unwittingly pay 50% more on the January invoice distributed by the company in early February due to the misleading ‘5% VAT’ claim.

The most affected consumers were consumers with maximum demand (MD), including Vintage Press Limited, publishers of The Nation and Sporting Life titles, MDAs, oil service companies and others, whose invoices usually reach hundreds of thousands or millions a month.

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VPL’s regional internal auditor, Oluranti Samson Oyediran, said he caught the attention of a manager at the regional office in Port Harcourt to identify the sharp practice in the company’s January 2020 bill.

“Although the law states that VAT was 5%, our calculations revealed that we actually paid 7.5% of the electricity consumed in the period.”

A PHED team, which confirmed that similar accounts were sent to other companies and large consumers known as MDs, criticized a team at VPL who protested against arbitrary VAT collection.

“I am aware that you wrote a frivolous letter to the general commercial manager, but I don’t know why you are complaining because hundreds of other companies have received similar accounts and have not complained,” said the PHED team (names withheld) Saturday during a visit from reading to the company.

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Oyediran noted that the current NPV charge of N1.606.596,39 for the month of January attracted VAT if N120.494,73, adding: “What this clearly shows is that, despite the fact that they declare that VAT was charged at 5%, what was my company actually charged was 7.5%. This is not only fraudulent, but it is very shameful for a public company to engage in this type of practice. ”

“It is pertinent to state here that the upward revision of VAT from 5 to 7.5 percent came into effect as of February 1, 2020, in accordance with the Finance Law.”

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He has already disclosed that the company had written to the management of PHED’s operations in Garden City East on D-Line, Port Harcourt to demand a reversal of the arbitrary charge.

In the meantime, it has been concluded that the affected consumers have threatened to drag the company before the Economic and Financial Crimes Commission (EFCC) of the fraudulent increase in VAT collection in January.

The attempt to obtain the electricity company’s comment on the controversy has been unsuccessful since February 19, when the company received our letter.


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