Ghana is losing a lot of money because its tax system is not working well, according to Finance Minister Dr. Cassiel Ato Forson. He says this is making it hard for the country to grow economically.
Speaking at the National Economic Dialogue in Accra on Monday, March 3, 2025, Dr. Forson explained that Ghana’s tax revenue is too low compared to other similar countries. Right now, the country collects only 13.5% of its total income from taxes, which is much lower than expected.
He blamed the problem on too many tax exemptions, poor tax collection, and people not paying their taxes properly. “The gap in VAT collection is huge,” he said. The Ghana Revenue Authority (GRA) planned to increase VAT collections by 32% in 2024, but they only managed 17%, which is even lower than the inflation rate.
Dr. Forson also revealed that tax exemptions on VAT, personal income tax, and import duties cost Ghana nearly 3.9% of its total yearly income. This does not even include exemptions for businesses. He pointed out that VAT exemptions on houses and land alone make up 33% of all tax breaks given.
He urged the government to quickly fix issues with VAT, reduce tax exemptions, and improve tax collection to increase revenue. He warned that if nothing is done soon, Ghana will have to depend on borrowing money from other countries to fund its development projects.
