mobilising domestic revenue

Ghana turns to domestic taxes to finance development over money market woes

By Jonas Nyabor

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Posted on January 18, 2022 15:05

A man holds Ghana’s cedi notes in Accra
A man holds Ghana’s cedi notes in Accra. REUTERS/Luc Gnago

Limited access to the international money market has forced managers of Ghana’s economy to look inwards for much needed revenue to finance its development. Finance minister Ken Ofori-Atta now says raising money from domestic taxes is the way to go.

The hard part: finding ways to convince millions of untaxed people in Ghana to contribute to the national kitty.

Only 8.2% of working Ghanaians pay income tax according to Ofori-Atta, who is developing ‘burden sharing’ strategies to pull the rest in.

“Only 2,364,348 are bearing the burden of the entire population as taxpayers as of August 2021. This is a trend that needs to be addressed to build a more equitable society,” the finance minister said while presenting the 2022 budget to parliament in December.

The low tax-to-GDP ratio of the country makes it hard to finance the country’s developmental agenda.

In the face of limited access to the international financial market, a proposed 1.75% electronic financial transaction levy (the E-levy) is the government’s first tool to bring in the informal sector.

“The essence of our proposal on the E-levy is to widen the tax net and generate the

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