A Fresh Take: Expanding Ghana's Tax Net and Boosting Revenue
Contribute to economic recovery by fulfilling your tax obligations
Kwaku Agyemang Kwarteng, the head honcho of parliament's finance committee, has urged a renewed commitment to tax payments as a means to help the government conquer economic struggles. While acknowledging the significance of resource management, he stressed that increased domestic revenue is crucial to the recovery process, emphasizing that everyone needs to contribute their fair share.
Addressing the House following the Mid-Year Fiscal Policy Review, Mr. Kwarteng criticized exemptions given to select individuals and companies in the name of investment, suggesting that these exemptions are problematic. "By exempting individuals in the name of investment promotion," he said, "we are creating problems. We deny Ghana the opportunity of communicating that our investment climate is strengthening because those taxes are in place. By encouraging the practice of selecting individuals and excluding them from taxation, we are creating opportunities for corruption."
In an attempt to boost domestic revenue, Ghana has turned to digitalization. The e-VAT, e-Levy, and Ghana.gov are just a few examples of initiatives designed to expand the tax net, eliminate leakages, and close the tax gap. The Minister of State at the Ministry of Finance, Dr. Mohammed Amin Adam, recently informed parliament that results from the pilot phase of the e-VAT are promising, and the Ghana Revenue Authority (GRA) is eager to expand its reach.
Government is applying a holistic approach to increase revenue mobilization. Some other strategies include strengthening tax compliance, fiscal policy reforms, educational campaigns, and urban development reforms. By emphasizing these areas, Ghana aims to create a more robust, equitable, and effective tax ecosystem that supports national development and economic resilience.
Here's a summary table outlining key initiatives and their expected outcomes:
| Initiative/Strategy | Description | Expected Outcome ||------------------------------------|----------------------------------------------------------------------------------------------|-------------------------------------|| Digitalization/Automation | eTax, e-VAT invoicing, digital tax clearance | Reduced fraud, increased transparency, wider tax base || Compliance/Enforcement | TIN registration, audits, partnerships with banks/regulators | More registered taxpayers, fewer leakages || Fiscal Policy Reforms | SME incentives, anti-evasion measures, international cooperation | Formalization of informal sector, reduced evasion || Education/Advocacy | Public awareness campaigns, tax justice advocacy | Increased voluntary compliance || Urban/Macroeconomic Strategy | Sustainable cities strategy, improved governance and infrastructure | Improved revenue mobilization, equitable growth |
Together, these initiatives aim to shape Ghana's tax ecosystem into a reliable engine fueling national development and economic resilience.
- The finance committee head, Kwaku Agyemang Kwarteng, suggested that exemptions given in the name of investment can create problems for Ghana's economy, preventing the communication of a strengthening investment climate due to the missing taxes.
- In an effort to boost domestic revenue, Ghana has implemented digitalization initiatives such as e-VAT, e-Levy, and Ghana.gov to expand the tax net, eliminate leakages, and close the tax gap.
- To create a more robust and equitable tax ecosystem, Ghana is employing a holistic approach that includes strengthening tax compliance, fiscal policy reforms, educational campaigns, and urban development reforms.
- By implementing various strategies like digitalization, compliance/enforcement, fiscal policy reforms, education/advocacy, and urban/macroeconomic strategies, Ghana aims to shape its tax ecosystem into a reliable engine that fuels national development and economic resilience.
