Ghana could boost its tax revenue and narrow the gap between potential and actual collections by cutting back on costly and poorly targeted tax incentives, the International Monetary Fund has suggested. According to the IMF, many tax breaks in the country fail to deliver the intended economic benefits and instead weaken the overall efficiency of the tax system.
The Fund highlighted that Ghana’s tax-to-GDP ratio currently stands at just 13%, reflecting a significant shortfall compared to its potential. Across Sub-Saharan Africa, similar gaps exist, often exceeding 5% of GDP, due to structural challenges such as high informality, administrative inefficiencies, and weak enforcement.
“In this context, scaling back costly and often poorly targeted tax expenditures could contribute to narrowing the tax gap by strengthening revenue performance and improving the efficiency of the overall tax system”, the IMF said.
The Finance Minister’s recent 2026 budget presentation underscored these challenges on the ground. He revealed that significant revenue leakages persist at Ghana’s ports, where systemic weaknesses in cargo classification, valuation, and inspection have undermined collections.
In 2024 alone, imports valued at GH¢204 billion were recorded, yet only GH¢85 billion was taxable, pointing to misclassification and under-invoicing. Such gaps are a clear example of why Ghana continues to fall short of its tax potential.
In this regard, the government is taking concrete steps to address these leakages and improve revenue collection. The Finance Minister announced that Artificial Intelligence (AI)-driven pre-arrival inspections will be deployed for all cross-border shipments. This technology is designed to detect under-valuation, flag high-risk goods, and strengthen Customs’ capacity to combat smuggling, improve safety, and protect national security.
By integrating automation into port operations, the government expects to significantly boost customs revenue, enhance trade efficiency, and close long-standing revenue gaps. These measures complement broader efforts recommended by the IMF to streamline tax incentives, improve administration, and mobilize domestic resources, ensuring that Ghana can maximize its tax potential and fund development priorities.
The IMF emphasized that reducing poorly targeted tax expenditures, strengthening enforcement, and improving efficiency in administration could help close the revenue gap. With external financing becoming more constrained, Ghana and other Sub-Saharan countries are urged to look inward, tapping under-explored areas of tax policy to build resilience and meet critical development needs.
