On Thursday, July 23, Dr Cassiel Ato Forson will stand up in Parliament to deliver the 2026 Mid-Year Budget Review, which is a statutory ritual under Section 28 of the Public Financial Management Act.
There is no doubt that the first half of the year has been very eventful. Many successes have been chalked but not without significant challenges.
To start with what has been going right, Ghana’s GDP grew 6.4% year-on-year in the first quarter of 2026, the fastest pace in years, with services expanding 7.1%. Inflation has cooled to 5.3% by June despite the consecutive hikes in previous months, down from the low-20s percentages of two years ago. The cedi has also been relatively stable.
On paper, these are the kind of macroeconomic indicators finance ministers dream of walking into a budget review with. But the Bank of Ghana’s own Summary of Economic and Financial Data tells a less comfortable story underneath the headline growth figures. By the end of March 2026, cumulative total revenue and grants had reached only 3.6% of GDP, with tax revenue alone at 3.0% of GDP.
Over the same three months, total government expenditure had already climbed to 3.9% of GDP, meaning that before the fiscal year had even found its rhythm, the government was spending faster than it was collecting. January produced a slim fiscal surplus of 0.3% of GDP; February swung back into a deficit of roughly 1.0%.
Earlier Tax Reforms
Ghana entered 2026 having deliberately given away a chunk of its own revenue base. It had already scrapped the E-Levy, the COVID-19 Health Recovery Levy and the betting tax, and restructured VAT, cutting the effective rate from 21.9% to 20%, lifting the VAT registration threshold from GH¢200,000 to GH¢750,000, and folding the GETFund and NHIL levies back into VAT so businesses can claim input credits on them.
The COVID levy repeal alone was projected to leave roughly GH¢3.7 billion in the hands of households and businesses this year rather than the Treasury.
The picture is getting clearer as the year unfolds. It is emerging that after the first half of the year, Ghana’s total tax revenue and grants for the first quarter of 2026 stood at GH¢57.53 billion. This fell short of the projected GH¢60.25 billion target by 4.51% (about GH¢2.72 billion). Despite missing the target, this represents a ~32.9% increase compared to the GH¢43.28 billion collected in Q1 2025.
This revenue underperformance is the puzzle Ato Forson has to solve in front of Parliament. The economic growth is not automatically translating into tax receipts, because much of it is happening in corners of the economy, informal trade, digital commerce, and services that Ghana’s tax architecture was never built to capture efficiently.
Borrowing Not a Viable Option
Under Ghana’s IMF Extended Credit Facility, the government has committed to a primary budget surplus of 1.5% of GDP this year, a target baked into an arrangement that has already disbursed roughly $2.8 billion and helped win Ghana a positive-outlook nod from Moody’s and an upgrade from S&P. A sixth ECF review is due later in 2026, and if mid-year numbers show revenue mobilisation drifting materially off target, that review becomes the moment the Fund could flag a deviation.
Borrowing the gap away isn’t really on the table either. External capital markets remain expensive for Ghana, concessional financing only goes so far, and the domestic bond market is still finding its feet after the Domestic Debt Exchange Programme. The next option is a spending cut. This means the government will have to cut capital expenditure, the money that builds roads, schools, and clinics, or cut wages, or debt service, which is nearly impossible.
So What’s Actually on the Table
Nothing here is confirmed, and the Finance Ministry has given no formal indication of its final choice. But several options are being actively discussed by tax analysts, each with a different logic and a different constituency of losers.
The first is the most politically loaded, which is reviving some version of the taxes Ghana just scrapped. Tax analyst Isaac Danso Agyiri argues that reinstating the E-Levy, COVID levy and betting tax could raise as much as GH¢18 billion by 2027. It is also the option most likely to reopen the exact political fight the government won plaudits for closing when it removed those taxes in the first place.
The second is less about new taxes than better enforcement of the ones that already exist. The IMF’s own advice to Ghana has consistently leaned this way. It calls on the government to scale back poorly targeted tax exemptions, tighten compliance, and let administrative reform, rather than higher rates, close the gap. GRA’s newly formed VAT Compliance and Enforcement Team, AI-driven pre-arrival inspections rolling out at the ports, and a planned system matching Bank of Ghana foreign-exchange transfers against verified import data are all attempts to squeeze more out of the existing tax base without a single new headline rate.
A third option under discussion is a targeted levy on the digital financial services or fintech space, an area of the economy that has grown explosively since the E-Levy’s repeal freed up mobile money transactions, but that currently contributes little in dedicated tax terms.
A fourth is broadening and raising excise duties, not just the familiar targets of alcohol and tobacco, but potentially extending coverage to plastics, sugary beverages and carbon-intensive goods, changes already flagged in proposed reforms to the Excise Duty Act as both a revenue and a public-health measure.
A fifth is squeezing more from the extractive sector, building on ground already broken this year. Parliament passed the Growth and Sustainability Levy (Amendment) Bill in March, trimming the levy on miners back down from 3% while introducing a sliding-scale royalty tied to global gold prices, effectively a windfall mechanism that lets the state capture more when bullion rallies, as it has for much of 2026, without needing a separate windfall tax.
A sixth, quieter option is simply a financial-sector tax of some description, aimed at banks and other institutions that have posted strong profits as interest rates and the macro environment have stabilised.
The Bottomline
Not everyone thinks more taxation, in any form, is the right answer. Ahead of the mid-year statement, civil society voices and opposition figures have pushed back on the idea that fiscal discipline should come mainly from squeezing citizens further. Critics point to a cedi that, even after its 2025 rally, has still depreciated against the dollar over the past year, and to a cost of living that hasn’t eased at the same pace as headline inflation.
Minority MPs have already dismissed the underlying 2026 Budget as failing to deliver growth or jobs, and some commentators are calling instead for the government to cut non-essential administrative spending and lean harder on efficiency gains before reaching for taxpayers’ pockets again.
Whatever the situation is, the government must fix this revenue puzzle, and whatever direction it takes, Ghanaians will get to know on the 23rd of July, 2026.
