It is a new dawn at the Ghana Revenue Authority (GRA) as tax mobilization in the country is set for a major transformation. The high informality of the economy, which is a major bane on domestic revenue mobilization, appears to be on the radar of the new Commissioner-General.
The Acting Commissioner-General of the Authority, Anthony Kwasi Sarpong, has unveiled a multi-pronged strategy which is expected to turn the tide of the vast informality that has bedevilled the country’s tax system. Speaking during the maiden edition of The High Street Journal’s X Spaces Conversations, in partnership with IMANI Africa and Norvanreports, Anthony Sarpong declared that 2025 will be the year of the informal sector, as the authority rolls out interventions aimed at formalizing the economy and widening the tax base through technology, data integration, and simplified tax compliance.
The Formalization Journey
Anthony Sarpong admits that the road to formalizing the economy will be a tedious one, but he is fully committed to the task. He describes the process of formalizing the economy as a long-term journey that hinges on education, policy reforms, and the deployment of digital systems.
“We believe this proposition is a journey,” he said, adding that “It requires good education, the right systems, and policies, and having the technology in place to do that.”
He hailed the already existing Ghana Card, indicating that it will be very critical in the journey since the Ghana Card now doubles as a Tax Identification Number (TIN). The system, he says, creates a national database for tracking individuals and businesses. This innovation, he stressed, has provided the GRA with unprecedented access to data and has helped to streamline taxpayer identification.
“I think as a country, we have started well with the introduction of the Ghana Card and also the policy that the Ghana Card is a TIN. That is the first one. You also see that the building up of the Ghana Card has created a huge database. That enables us to be able to access the data of businesses and individuals,” he remarked.
A Flat Tax Regime to Encourage Compliance
In a bid to make tax compliance easier and less intimidating for small informal sector players, the GRA is implementing a simplified flat tax rate system. Anthony Sarpong notes that this framework, which allows individuals to declare basic information such as income and profit without the burden of complex forms, is expected to significantly boost voluntary compliance.
He says the flat tax system is not the final step. There are also plans to train and educate these informal sector players as part of the process of formalization. With this, he is optimistic that, after acquiring the necessary knowledge and skills, they will be migrated into the complex systems of tax administration.
“We are going to give them a framework to work with… A flat tax rate will encourage them. As they grow, they are gradually also educated to enter into a more complex system,” he indicated.
Simplified Tax Filing and Payment
The Acting Commissioner-General also says he has plans to simplify another hurdle that has been hindering compliance within the informal sector, which is the filing processes and payments. The GRA boss says the authority is simplifying tax forms and offering more convenient payment options using mobile technology.
With mobile phone penetration increasing, especially among artisans and traders, the authority is leveraging mobile money platforms to enable real-time tax payments and receipts.
“We are also simplifying the tax filing for the informal sector. A very simple one that shows this is my income, this is my profit, and this is the flat rate that you have asked me to pay. We should make it possible that wherever they operate from, they are able to see where they are supposed to pay. And they are able to pay and immediately receive a receipt or confirmation of evidence of what they’ve paid,” he indicates.
He adds, “We believe that through that, you achieve the levels of convenience that they are asking for in terms of affordability of coming to their tax net,
Leveraging Technology and Data Integration
He also further underscores the GRA’s significant investment in data infrastructure. The authority, he reveals, has built a comprehensive data center that stores information on Ghanaian citizens and residents. He added that the next phase involves integrating GRA systems with those of other institutions such as the Registrar of Companies, SSNIT, and the Customs Division.
“Every business and individual who has registered will be connected to our data point,” he says.
This integration will allow the GRA to match business activities with tax records and close gaps in compliance. In addition, collaborations with SSNIT and port entry points will help track economic actors across the value chain, from imports to domestic taxation.
Targeting Artisans and Vocational Graduates
Recognizing the large number of artisans operating informally, the GRA intends to work with built environment professionals and large developers who hire these workers. These professional bodies and developers, the GRA boss says, will help in the provision of data and sometimes withhold taxes for onward remittance to the authority.
“Those large entities will be able to gather data on them… and be able to control taxes or indicate their level of income,” the Commissioner-General reveals.
Vocational institutions and training centers will also play a role. Graduates from these institutions will be tracked from the point of graduation to help maintain a database of skilled workers for future tax engagement.
The Use of Mobile Money Data to Identify Informal Earners
Another innovative step includes analyzing mobile money transactions to identify patterns of income and potential tax liabilities. Since many informal workers now operate within the mobile financial ecosystem, this data will serve as a tool to assess tax obligations and assign fair flat rates.
It is the vision of the Commissioner-General to investigate the incomes of these persons to ascertain the kinds of payments they receive through the mobile money platforms so that taxes can be applied if they are payments.
“Analysing the data for mobile money, we believe that it is one of the ways to be able to identify them, and where we see bills have not been paid, give them a flat rate or taxes that are appropriate for them to pay,” he announces.
The Journey Ahead
Mr. Sarpong acknowledges that integrating the informal sector into the tax regime is a complex, multi-stakeholder process that will take time. But with the current momentum in digitalization and strategic planning, he expressed optimism that Ghana can build a more equitable and efficient tax system.
He also indicates that GRA is mindful of privacy. He promises that the Authority will ensure that having access to personal and business data does not mean it will be used in a manner that breaches confidentiality. He emphasized the importance of trust and integrity in managing taxpayer information.
It is the vision of Anthony Kwasi Sarpong that these measures to formalize the economy, if not put GRA ahead of their customers, will put them at par and ensure that the country mobilizes the right taxes for national development.
