Dr. John Kwakye, an economist and Director of Research at the Institute of Economic Affairs, believes the Finance Minister-designate, Dr. Cassiel Ato Forson’s proposal to increase Ghana’s tax-to-GDP ratio to 18 percent is achievable.
Dr. Kwakye suggests that the target can be reached by addressing existing tax loopholes, expanding the tax base, and improving tax administration.
In his recent statements, Dr. Forson highlighted the government’s goal to raise tax revenue contributions to the country’s GDP from the current 13.8 percent to 18 percent in the medium-term. He emphasized that this could be achieved without increasing taxes by improving compliance and addressing inefficiencies within the tax system.
Dr. Forson also noted that a target of 20 percent tax-to-GDP by 2027 might be too ambitious, given the current economic situation. A recent study on Ghana’s tax system showed that the country’s tax-to-GDP ratio has only slightly improved since 2017, aligning with the average for sub-Saharan Africa but falling slightly short of the global average for similar income countries.
In addition to this, the Finance Minister nominee indicated plans to collaborate with the Ghana Revenue Authority (GRA) and other relevant bodies to boost compliance and reform the system. He also revealed intentions to eliminate “nuisance taxes” like the betting tax, which brings in minimal revenue but causes public dissatisfaction.