ISSER Report calls for research on flat-rate tax for businesses

The Institute of Statistical, Social and Economic Research (ISSER) has recommended in its latest State of the Ghanaian Economy Report 2023 and Q3 2024 Review that research is conducted into implementing a flat-rate tax for businesses.

This is a policy it says could streamline the tax compliance process and improve revenue collection.

This recommendation aligns with a proposal from NPP presidential candidate Dr Mahamudu Bawumia, who has advocated for a flat-rate tax as part of a broader tax reform strategy aimed at making Ghana’s tax system more business-friendly.

“There is also a need for research on a flat-rate tax for businesses,” ISSER notes, highlighting that a simplified tax structure could ease the administrative burden on businesses, particularly small and medium-sized enterprises (SMEs), while potentially increasing voluntary tax compliance.

This system would address long-standing challenges within Ghana’s complex tax framework, which ISSER believes can hinder compliance and stymie revenue generation.

Dr Bawumia’s tax reform agenda proposes a flat-rate tax as one of several transformative measures, along with a tax amnesty and the elimination of certain unpopular tax levies such as the e-levy and betting tax.

These changes, he argues, would create a more streamlined tax regime that encourages private sector growth and investment.

His campaign has emphasized the need to shift away from a multiplicity of tax handles, which he suggests have burdened businesses and everyday Ghanaians alike.

ISSER’s endorsement of further research into a flat-rate tax underscores the institute’s focus on evidence-based solutions to Ghana’s revenue challenges.

By simplifying the tax structure, the flat-rate model could reduce compliance costs for businesses and improve collection rates, which could, in turn, generate more stable and sustainable revenues to support national development.