Ghana’s current tax to GDP ratio poor compared to our peers, Ofori-Atta
The Minister for Finance, Ken Ofori-Atta, has stated that the approved 1.75 percent e-levy on electronic transactions that exceeds GH¢100 per day would help increase the country's tax to GDP ratio to 20 percent.
He said as at 2019 Ghana’s tax to GDP ratio was 12.2 percent which was below the overall tax to GDP ratio for sub-Saharan Africa of 16.5 percent.
He furthered that the country's tax to GDP was worse compared to that of South Africa (26.7 percent).
Ken Ofori-Atta said this at a press briefing on the modification of the 2022 budget on Monday, December 6, 2021.
He had earlier sent the reviewed budget to the Speaker of Parliament, Alban Bagbin for consideration before the Appropriation Bill for the budget is passed.
According to him, Ghana’s voters' register and active mobile money accounts suggest that there were between 17 million to 19 million economically active persons in the country but only approximately 8 percent (2.4 million Ghanaians) pay income tax.
“Only 45,109 entities are registered as corporate taxpayers while 54,364 persons are registered as self-employed taxpayers at the Ghana Revenue Authority”, he said.
“We cannot continue to depend on such a low tax base to generate adequate revenue, service and reduce our debt, to build our infrastructure (roads), and to create needed jobs for our youth. The Future is, therefore, one of “sacrifice” from all of us and “burden” sharing as a people with one language to transform the Republic”, he added.
This narrative, the finance minister said, was a poor reflection on Ghana and for now, the e-levy was the greatest opportunity change to widen the tax net and generate revenue to support government's expenditure aimed at improving the lives of Ghanaians.
He noted that the e-levy was largely progressive. Meaning, the rich would pay more.
Ken Ofori-Atta said to lessen the effect of the e-levy on the vulnerable, government would work with all stakeholders to ensure that the all-inclusive cost was reduced by 0.25 percentage points.
