In an effort to boost economic growth and increase revenue mobilization, the Ghanaian government is taking steps to improve the country’s tax-to-gross domestic product (GDP) ratio.
Abena Osei Asare, the Minister of State at the Finance Ministry, highlighted the importance of this initiative during a panel discussion at the IMF/World Bank Spring Meetings in Washington D.C.
One of the key challenges facing Ghana’s revenue mobilization efforts is the narrow tax base, largely due to the prevalence of the informal economy and a culture of non-compliance. Before 2017, only about 1.2 million people were paying direct taxes, despite approximately 6 million people being eligible. This highlights the need to address the narrow tax base in order to increase revenue collection.
To tackle these challenges, the government is implementing measures such as digitizing revenue lines, reducing human interventions in tax revenue administration, and promoting a culture of compliance. By expanding the tax base and improving tax collection processes, the government aims to increase revenue generation and reduce the fiscal deficit.
Mrs. Asare emphasized the importance of utilizing public financing in the best way possible to support citizens. She explained that efforts are being made to ensure that public funds are effectively used to benefit the population.
