A new report by BudgIT Ghana has revealed that Ghana’s informal sector remains open to taxation, but deep-seated distrust in government institutions continues to hamper voluntary compliance.
Titled “Ghana’s Untapped Economy: Analysis of Tax Compliance Behaviour of Informal Sector Workers in the Greater Accra Region”, the study, conducted in partnership with the Society for Women in Taxation Ghana and the International Budget Partnership (IBP), highlights that many informal workers are willing to fulfil their tax obligations. However, systemic issues, including perceptions of corruption and mismanagement, are undermining revenue mobilisation efforts.
BudgIT Ghana is a civic organization using technology to enhance citizen engagement and promote transparency in public spending. By simplifying government budgets and financial data, it empowers citizens to demand accountability. BudgIT collaborates with civil society, public institutions, and the media in fiscal analysis, civic tech, and data representation to drive societal change.
According to the findings, informal workers feel disconnected from the benefits of taxation due to a lack of visible improvements in infrastructure and essential services.
“Many believe tax revenues are either mismanaged or lost to corruption,” the report stated.
The study also cites income instability, complex tax processes, and bureaucratic registration systems as barriers to compliance, particularly for those with limited formal education.
Women in the sector face disproportionate challenges. Female entrepreneurs, who make up a significant share of the informal workforce, are burdened by indirect taxes, frequent enforcement, and experiences of harassment while juggling business and caregiving responsibilities.
Despite these hurdles, BudgIT Ghana notes a strong willingness among informal sector workers to pay taxes if the system becomes fairer, simpler, and more transparent.
The report recommends reforms such as simplified tax registration, mobile and decentralised payment platforms, and USSD-based options to ease compliance. It also advocates for gender-sensitive tax policies with flexible payment arrangements and anti-harassment enforcement to create an equitable tax environment for all.
