The Ghana Revenue Authority (GRA) has set an audacious revenue target of GHȼ200 billion for the year 2025.
This announcement has sparked discussions across economic and policy circles, given that Ghana’s revenue collection has historically faced significant challenges. Achieving this target would not only be a testament to the country’s economic resilience but also a game-changer in financing critical developmental projects.
Ghana’s Revenue Performance in Recent Years
Ghana’s revenue mobilisation has seen steady growth, but it has consistently lagged behind expenditure demands. In 2022, the GRA collected approximately GHȼ100 billion in revenue, marking a notable increase from the previous year.
In 2023, the figure climbed to about GHȼ125 billion, aided by digital revenue measures and improved tax compliance strategies. The target for 2024 has been set at GHȼ150 billion, indicating a gradual and ambitious growth trajectory.
However, hitting GHȼ200 billion in 2025 represents a quantum leap in revenue mobilisation. This milestone, if achieved, would mean an additional GHȼ75 billion in revenue compared to 2023, an extraordinary feat.
The implications of such a success include significant reductions in the national debt burden, enhanced infrastructure development, improved social services, and a more resilient economy.
Key Strategies to Achieve the GHȼ200 billion target
To meet this ambitious goal, the GRA must adopt innovative and aggressive revenue mobilisation strategies. Below are the key areas of focus:
1. Expanding the Tax Net: Tapping into the Informal Sector
Ghana’s informal sector is vast, accounting for nearly 70% of the workforce. However, tax compliance in this sector remains minimal due to a lack of formal structures and mistrust in tax administration. To bring this sector into the tax fold:
- Simplifying Tax Payment Processes: Many informal sector operators avoid paying taxes due to bureaucratic and complex procedures. The introduction of a mobile-based tax payment platform will make it easier for small businesses and traders to fulfill their tax obligations.
- Incentivizing Compliance: The GRA can introduce benefits such as reduced tax rates for compliant businesses, tax clearance certificates for business loans, and public recognition for tax-compliant entrepreneurs.
- Strengthening Data Collection: With the Ghana Card system in place, the government can track income flows and encourage voluntary compliance by linking taxation to national identification.
2. Leveraging Technology for Efficient Tax Collection
Modernising tax administration through technology will enhance efficiency and eliminate revenue leakages. Strategies include:
- Automation of Tax Filing and Payments: Digitalisation of tax processes, including the introduction of AI-powered tax assessment tools, can streamline tax collection and minimise corruption.
- Artificial Intelligence and Data Analytics: By analysing financial transactions, AI can identify inconsistencies in tax declarations, reducing underreporting and tax fraud.
- Taxation of Digital and E-Commerce Businesses: With Ghana’s increasing digital transactions, enforcing VAT on online sales and e-commerce platforms can significantly boost revenue.
3. Tackling Tax Evasion and Strengthening Compliance Measures
Tax evasion remains a major hindrance to revenue growth. Addressing this requires:
- Strict Enforcement of Tax Laws: Strengthening compliance units to conduct frequent audits and ensuring timely penalties for defaulters.
- Collaboration with Financial Institutions: Banks and fintech companies must be mandated to share financial transaction data to identify tax-evading entities.
- Anonymous Whistleblower Rewards: Implementing a robust whistleblower system where informants receive financial rewards for reporting tax evasion.
4. Expanding Corporate and Property Taxation
Corporate tax loopholes and underutilized property taxation present opportunities for additional revenue.
- Reviewing Corporate Tax Incentives: While tax incentives attract investments, excessive exemptions should be reviewed to ensure businesses contribute fairly.
- Effective Property Tax Collection: Many properties in Ghana remain untaxed or undervalued. Implementing digital property valuation systems will ensure that real estate owners pay their fair share.
5. Increasing Public Trust and Transparency
Public confidence in tax systems directly influences voluntary compliance. To build trust:
- Transparency in Tax Utilization: The GRA should publish reports on how tax revenues are spent, demonstrating tangible benefits such as improved infrastructure, healthcare, and education.
- Extensive Public Education Campaigns: The GRA must engage the public through media, forums, and outreach programs to create awareness on tax obligations and benefits.
- Enhancing Service Delivery: A more efficient, customer-friendly GRA will encourage taxpayers to comply without hesitation.
6. Strengthening Cross-Border Trade and Import Duty Collection
With Ghana’s ports serving as vital revenue sources, strategic improvements can enhance import duty collection.
- Enhanced Customs Surveillance: Deploying AI-powered scanners at entry points can prevent smuggling and ensure accurate duty assessments.
- Reducing Under-Invoicing and Fraudulent Declarations: Strengthening customs inspections and imposing stricter penalties for under-invoiced imports.
- Leveraging the AfCFTA Opportunity: Ghana’s strategic position in the African Continental Free Trade Agreement (AfCFTA) should be leveraged to boost trade tax revenues.
In Conclusion, achieving GHS 200 billion in revenue by 2025 is a formidable but attainable goal. The GRA must embrace a mix of aggressive tax reforms, technological innovations, and public engagement strategies. With bold leadership from the new Commissioner, unwavering political support, and improved tax compliance, Ghana stands at the threshold of a revenue revolution. If successful, this milestone will redefine the country’s fiscal strength and economic future.
The writer, Ephraim Ofori Numosuor, is a Financial Economist | Research & Policy Analyst
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