The Institute of Fiscal Studies (IFS) has identified low revenue generation from the extractive sector, revenue leakages and excessive tax exemptions as major factors undermining Ghana's domestic revenue mobilisation efforts.
The country ranked 18th out of 25 Sub-Saharan African countries in revenue mobilisation. In 2022, the government collected GHS 96.6 billion in total revenue and grants.
The IFS policy brief presented by Executive Director Dr Said Boakye expressed concern about the country's poor ranking, saying Ghana could have mobilised significantly more revenue if it had performed better. The brief noted that Ghana's inability to mobilise adequate revenue had constrained infrastructure development and socio-economic growth. Dr Boakye presented the policy brief in Accra.
Ghana's revenue mobilisation efforts are crucial for the country's economic development, as it affects the government's ability to finance national development. The IFS findings are consistent with previous reports highlighting the need for Ghana to improve its revenue mobilisation. The country's GDP growth and development are closely tied to its ability to mobilise revenue.
According to Dr Boakye, the government's revenue collection represented 15.7 per cent of GDP and equivalent to US$11.68 billion in 2022. The IFS brief noted that excessive tax exemptions to attract investors are a major factor undermining Ghana's revenue mobilisation efforts. The brief also highlighted the need for Ghana to address revenue leakages and improve its revenue generation from the extractive sector.
The implications of the IFS findings are significant, as they highlight the need for Ghana to improve its revenue mobilisation efforts to achieve its economic development goals. The government must address the issues of corruption, revenue leakages, and excessive tax exemptions to increase its revenue collection.
The IFS brief provides valuable insights into the challenges facing Ghana's revenue mobilisation efforts and the need for urgent action to address these challenges.