By Ghana’s Deputy Minister of Finance, Dr. Alex Ampaabeng, has revealed that only about 1.5 million out of 7.9 million registered taxpayers in the country are currently honoring their tax obligations. This startling statistic was disclosed during the launch of the 8th Ghana Economic Update by the World Bank.
Dr. Ampaabeng stated that the Ministry of Finance and the Ghana Revenue Authority are currently cleaning the tax database to increase tax revenue. He emphasized the government’s commitment to improving the fiscal environment, particularly by reducing human interface in tax collection and enhancing digital collection methods.
“Going forward, reducing the human interface is key to growing our [Ghana’s] tax revenue. The Ministry of Finance is working with the GRA to reduce lots of tax infractions,” Dr. Ampaabeng said.
The World Bank report highlighted that Ghana’s tax collection has been low compared to its peers. Between 2017 and 2021, Ghana’s average tax collection was 13.2% of Gross Domestic Product (GDP), well below the Sub-Saharan Africa average and 8.0 percentage points short of the country’s estimated tax capacity of 21.2% of GDP.
The report identified areas of inefficiencies within Ghana’s tax policy framework and compliance mechanisms. It suggested rationalizing large tax expenditures that have contributed to the overall decline in tax revenues, while balancing the need to reduce revenue losses against potential distributional and social impacts.
The World Bank emphasized that addressing these issues could help ensure macroeconomic stability and generate resources necessary for sustainable long-term growth and poverty reduction efforts.
As Ghana grapples with its fiscal challenges, the government’s focus on improving tax compliance and modernizing collection methods reflects a broader effort to strengthen the country’s economic foundation. The success of these initiatives will be crucial in determining Ghana’s ability to fund essential services and drive economic development in the coming years.
Source: myjoyonline.com
