Ghana’s Tax Revenue Surges to Record High, Beats Target by 3.5%

Ghana has achieved a remarkable feat in its tax revenue mobilization, surpassing its revised target for the 2023 fiscal year by 3.5%.

According to the Ghana Revenue Authority (GRA), the West African nation collected GH¢113.06 billion in tax revenue for the year, compared to a revised target of GH¢109.19 billion.

This represents a nominal growth rate of 49.3%, the highest ever recorded in the last 20 years, and the highest tax-to-GDP ratio of 14.1% in the last six years.

The GRA attributed the impressive performance to various factors, including intensified compliance activities, high payment of corporate income tax, especially from the banking sector, effective classification and valuation of goods, and improvement in monitoring of leakages.

The Commissioner-General of GRA, Rev. Dr. Ammishaddai Owusu-Amoah, expressed his appreciation to the dedicated staff, taxpayers, and stakeholders for contributing to the success story.

He also appealed to all eligible individuals and businesses that earn income to contribute their fair share towards the socio-economic development of Ghana.

Ghana’s tax revenue achievement is in contrast to the challenges faced by many African countries in the wake of the COVID-19 pandemic, which disrupted economic activities and reduced fiscal space.

According to the African Tax Administration Forum (ATAF), the average tax-to-GDP ratio for the continent declined from 16.5% in 2019 to 15.1% in 2020, the lowest level since 2010.

The ATAF also noted that the tax revenue shortfall for Africa in 2020 was estimated at $51.2 billion, equivalent to 10.4% of the total tax revenue collected in 2019.

However, the ATAF projected a recovery in tax revenue for Africa in 2021 and 2022, based on the assumption of improved economic growth and continued implementation of tax reforms.

Ghana, as one of the fastest-growing economies in Africa, has been implementing various tax reforms to enhance its revenue mobilization and reduce its dependence on external financing.

Some of the reforms include the introduction of the electronic tax stamp system, the tax identification number system, the upfront VAT payment act, and the tax on electronic transactions.

The GRA has also announced its intention to expand the tax base with the various initiatives outlined in the 2024 budget statement, such as the digitalization of the tax administration, the implementation of the common reporting standard, and the establishment of the Ghana Tax Academy.

The GRA has further assured that it will continue to engage stakeholders while rolling out such initiatives for easy implementation.

Ghana’s tax revenue performance is a testament to the resilience and potential of its economy, which is expected to grow by 6.2% in 2024, according to the International Monetary Fund (IMF).

The IMF also commended Ghana for its prudent fiscal management and effective response to the COVID-19 crisis, which helped to mitigate the impact on the vulnerable segments of the population.

Ghana’s tax revenue success is also a sign of hope for the continent, as it demonstrates the possibility of mobilizing domestic resources to finance the sustainable development goals and the African Union’s Agenda 2063.

Source: MyJoyOnline