Ghana has not performed well in revenue mobilization compared to its peers – Dr. Ato-Forson

The Finance Minister, Dr. Cassiel Ato Aforson, has noted that Ghana falls short in tax revenue mobilization when compared to its peers, emphasizing that an urgent reform is needed to bridge the gap.

Speaking at the National Economic Dialogue 2025 in Accra on Monday, March 3, Dr. Ato-Forson made a clarion call to reform Ghana’s tax regime to make it effective for tax collection. He says rationalizing the collection of taxes is vital to the growth of the country’s local economy.

Dr. Ato-Forson emphasized that the Ghana Revenue Authority missed its 32% tax revenue target last year, with a significant shortfall of 17% below the national inflation rate.

“The VAT gap is huge; last year GRA programmed to increase the VAT effort by 32%; unfortunately, they ended up doing 17% currently below inflation, and that should tell you that there is a significant problem.”

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Dr. Ato Forson Ghana’s domestic revenue mobilization stagnated in the last decade and remains below its peers.

“Your Excellency, Ghana has not performed well in revenue mobilization compared to its peers.

He explained that Ghana collected 13.5% of GDP in tax revenue, whilst collection from other major taxes remained low, especially value-added tax, VAT, as compared to other neighboring countries.

Dr. Ato-Forson pointed out that numerous tax exemptions and complexities of the tax system had a detrimental impact on revenue.

According to him, this would mean urgent reforms to rationalize our value-added tax regime, which is currently distorted, and as a result, there is very little compliance.

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Dr. Ato-Forson further stated that the fiscal cause of tax exemption calls for rationalization while mitigating the impact on the poor.

“The Tax Exemption Act in the year 2022 sets out clear criteria and guidance, but other legislation introduced further tax incentives that deviate from the national tax benchmark. Tax exemptions from VAT, PIT, and import duties are estimated to generate a loss of about 3.9% of our GDP. This amount does not include corporate income tax exemptions.”

He said, “While these exemptions often offer some relief, they are costly and create leakages, complexities, and distortions in the tax system.”.