The Ghana Revenue Authority (GRA) has revealed that the sharp recovery of the cedi has significantly reduced government revenues, particularly from port duties and the extractive sector.
Commissioner-General Anthony Kwasi Sarpong explained that the local currency’s appreciation from GH¢15 to about GH¢10.5 to the US dollar within three months has resulted in a 30% drop in cedi-denominated receipts.
“If you look at the duties at the port, they are denominated in foreign currency, mostly in USD. And therefore, once the exchange rate, which is overall good for the economy, dropped from 15 to about 10.5, that’s a 30% sharp drop in cedi terms. So obviously, in a split of three months, what comes to you drops by 30%,” Mr Sarpong said on JoyNews’ PM Express Business Edition.
He noted that the extractive and petroleum sectors which also remit taxes in dollars have seen similar reductions. “Once you lose 30% from the rate point of view, you are immediately hit with a 30% drop in cedi terms,” he stressed.
Short-Term Pain, Long-Term Gain
Despite the immediate setback, Mr Sarpong expressed optimism that the appreciation will ultimately support stronger revenue performance. With import costs easing, he expects trade volumes to rise, boosting tax collections.
“We are confident that because the rates are lower and the rates have come down, importers can import more… while their initial stock that we’re holding gets finished and they are restocking, it’s going to be more, and we will regain the taxes from there,” he remarked.
Expanding The Tax Base
Mr Sarpong said structural reforms are critical to cushioning government finances. Central to this is a modified taxation regime targeting Micro, Small and Medium Enterprises (MSMEs).
“We are introducing within a month what we call the modified taxation, one to define at a minimum base taxes that certain categories of businesses will pay,” he disclosed.
Under the plan, MSMEs with an annual turnover of about GH¢200,000 would pay 3% in taxes roughly GH¢3,000 to GH¢5,000 annually. With an estimated 5 million such businesses in Ghana, the GRA hopes to bring at least 2 million into the tax net, potentially generating GH¢10 billion annually.
The GRA is also rolling out new digital systems to tax online transactions directly at the point of payment.
“Before the end of the year, we are introducing a digital technology such that transactions that are taking place online, we have visibility of it and also importantly, deduct the tax component at the point of payment,” Mr Sarpong said, describing the initiative as a “game changer.”
The Authority will complement this with nationwide tax education campaigns to deepen compliance.
“For us, data and technology is the way to go. This is the future of the taxpayer, and we must be future ready now and also into the future,” Mr Sarpong stressed.
While the cedi’s rebound has dealt a temporary blow to government revenues, the GRA maintains that reforms, digitalisation, and expanded compliance will restore momentum and safeguard fiscal stability.
