81% of taxpayers fall short on their obligations – Finance Ministry
The Finance Ministry is worried that only 1.5 million out of approximately 7.9 million registered taxpayers fulfil their tax obligations.
This reveals that a significant 81% (6.4 million) of the 7.9 million taxpayers fail to meet their responsibilities, leaving only 19% (1.5 million) who contribute taxes in Ghana.
The Deputy Minister of Finance, Dr. Alex Ampaabeng, revealed the shocking figures at the launch of the 8th Ghana Economic Update by the World Bank.
According to him, his outfit and the Ghana Revenue Authority are cleaning the tax database to ensure the nation accrues more tax revenue.
He continued that the government will do everything possible to improve the fiscal environment.
He disclosed the government will reduce the human interface concerning tax collection and improve digital systems.
“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,” he assured.
Ghana’s tax collection has been low relative to its peers. Between 2017 and 2021, Ghana’s average tax collection was 13.2% of Gross Domestic Product (GDP).
This was 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 World Bank report identified areas of inefficiencies within Ghana’s tax policy framework and compliance mechanisms.
The report highlighted areas for improvement, such as streamlining significant tax expenditures that have contributed to declining overall tax revenues.
Achieving this balance would involve mitigating revenue losses while considering potential distributional and social impacts.
The World Bank emphasized that addressing these issues could foster macroeconomic stability and provide resources critical for sustainable long-term growth and poverty alleviation efforts.
Meanwhile, Finance Minister Dr. Mohammed Amin Adam will today, July 23, 2024, present the 2024 Mid-Year Budget Review in Parliament.
This will be his first budget presentation since becoming Finance Minister in February 2024.
The presentation is in accordance with Section 28 of the Public Financial Management Act, 2016 (Act 921).
The review is expected to provide a revised financial plan and an updated economic outlook for Ghana.
A statement from the ministry said the review would cover economic and fiscal performance for the first half of the year.