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The Ministry of Finance (MoF) has released an updated version of the “Survey of the Ghanaian Tax System,” produced in collaboration with TaxDev researchers from the UK’s Institute for Fiscal Studies (IFS). This report, which provides detailed information on Ghana’s tax system as of January 2024, serves as a valuable resource for policymakers, researchers, and the general public. It builds upon a previous edition published in 2021, offering insights into the current tax structure, policy trends, and revenue performance.
The updated Survey outlines the key design features of various taxes in Ghana and tracks recent developments in tax policy, administration, and revenue collection. It also compares Ghana’s tax rates and revenue statistics with those of other countries.
Key findings of the report include:
– Ghana’s tax-to-GDP ratio was 13.8% in 2022, below the government’s target of 18-20% by 2027. Although this ratio is nearly 6 percentage points higher than in 2000, it has fluctuated with minimal gains since 2017.
– Since 2000, much of the revenue growth has come from corporate and personal income taxes, along with VAT-type taxes. However, revenue growth from personal income tax (PIT) and VAT has stagnated recently. By 2022, these three types of taxes accounted for nearly 70% of total collections, up from 57% in 2000.
– Tax revenue from international trade has decreased in significance but remains important. In 2022, 33% of total tax revenue came from imported goods (including VAT on imports), compared to 54% in 2000. Specifically, import duties contributed 13% of overall tax revenue in 2022, down from 18% in 2000.
The report also highlights that while Ghana’s tax-to-GDP ratio is typical for sub-Saharan Africa, it falls slightly below average compared to countries of similar income levels worldwide. Out of 28 lower middle-income countries with available data, Ghana ranked 16th in tax revenue collection in 2022. Additionally, the analysis revealed that corporate income tax revenues in Ghana exceed expectations relative to other countries, while personal income tax and general sales tax revenues are lower than expected.
In a statement, the Ministry of Finance emphasized, “The Government of Ghana is committed to both evidence-based and transparent tax policymaking, with the Survey of the Tax System, alongside the Medium-Term Revenue Strategy, being a key part of this approach.”
The ministry also acknowledged its ongoing collaboration with the UK Foreign, Commonwealth, and Development Office (FCDO) and the IFS on tax policy analysis. This partnership, which began in 2016 and will continue until 2030, is aimed at building long-term capacity in tax policy evaluation. “The work the researchers from the IFS undertake with the team from MoF and GRA falls under broader work being undertaken at the FCDO-funded Centre for Tax Analysis in Developing Countries (TaxDev),” the statement added. The Survey of the Tax System is one of the key outputs of this joint initiative.
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