The Ministry of Finance (MoF) has announced a strategic collaboration with the Ghana Revenue Authority (GRA), supported by the UK Foreign, Commonwealth and Development Office (FCDO), to enhance the country’s tax policy analysis.
Through this partnership with the Institute for Fiscal Studies (IFS) in the UK, the initiative aims to build long-term analytical capacity in assessing the impact of tax policies and improving overall fiscal governance in Ghana.
A key component of this collaboration is the updated survey of the Ghanaian Tax System, jointly produced by MoF and TaxDev researchers from the IFS. Published in January 2024, this survey provides comprehensive information on Ghana’s tax system and serves as a valuable resource for policymakers, researchers, and the public.
It is also part of an ongoing programme that began in 2016 and is set to continue until 2030, under the FCDO-funded Centre for Tax Analysis in Developing Countries (TaxDev).
The survey highlights significant trends in Ghana’s tax landscape, particularly noting that the country’s tax-to-GDP ratio stood at 13.8% in 2022, falling short of the government’s target of 18-20% by 2027. While the ratio has risen by nearly six percentage points since 2000, progress has been slow and gains have been minimal since 2017, raising concerns about the country’s revenue growth.
Corporate income tax, personal income tax, and VAT have been the primary drivers of revenue growth since 2000, with these three taxes accounting for nearly 70% of total tax collections in 2022, compared to 57% in 2000.
However, the survey also reveals a recent stagnation in revenue growth from personal income tax and VAT-type taxes, signaling challenges in maintaining this upward momentum.
The Ministry emphasized that the collaboration with the IFS and FCDO goes beyond this survey. The broader partnership is focused on equipping Ghana’s fiscal authorities with the analytical tools necessary to design more effective tax policies and assess their long-term impacts, fostering a stronger and more resilient tax system.
As part of this programme, researchers from the IFS work closely with teams from MoF and GRA, engaging in ongoing analysis of critical tax policy issues. This effort is key to supporting Ghana’s fiscal objectives and ensuring that tax reforms are aligned with both national goals and international standards.
Through this sustained collaboration, the Ministry of Finance remains committed to increasing Ghana’s tax-to-GDP ratio and achieving more robust and equitable tax policies that will benefit the country’s development path.
