Eva Mends, Chief Director at Ghana’s Finance Ministry, has highlighted the Ministry’s ongoing challenge of developing a tax system that will be broadly accepted by Ghanaians to increase the nation’s tax-to-GDP ratio by 5% to 8%.
Speaking at the Ishmael Yamson & Associates Business Roundtable themed “African Businesses Collaborating For Global Success”, Ms. Mends emphasized the necessity of boosting tax revenue to GDP to rationalize government expenditure.
Ms. Mends pointed out that the Electronic Transactions Levy (E-Levy) had offered an opportunity to enhance tax revenue, particularly from the informal sector, but acknowledged that its implementation had not met expectations.
“Our challenge is what tax to implement that would be acceptable to all Ghanaians and achieve the 5% – 8% tax revenue-to-GDP increment target by the Ministry to help rationalize expenditure,” she stated.
“The E-Levy was a very nice opportunity to do so, to get all Ghanaians, particularly those in the informal sector, to pay taxes. But I don’t know how we got it wrong, I think we should probably take a second look at it, otherwise 80% of Ghanaians will not pay taxes,” she added.
The government’s medium-term target for tax revenue-to-GDP ratio is between 18% and 20%.
Currently, Ghana’s tax revenue-to-GDP ratio target for 2024 is at 16%.
Ghana’s tax revenue to GDP ratio over the years has averaged around 13%.
Speaking further at the Business Roundtable, Ms Mends quipped the Government will continue to work to stabilize and improve the country’s macroeconomic environment to help the private sector grow and thrive.
The Ishmael Yamson & Associates Business Roundtable believes African businesses can work together to achieve their full potential.
The firm takes immense pride in hosting the annual Business Roundtable as its way of making a meaningful impact and driving positive change in Ghana and on the African continent.
Ishmael Yamson & Associates is a management consulting practice that applies two core specializations in business and organizational transformation and leadership development, to help clients create and unleash value for sustained growth.
Norvanreports