The Finance Minister painted a bleak picture of the income mobilization obstacles Ghana must overcome in order to become a self-sufficient economy.
Less than 10% of Ghana’s 30.8 million people pay direct taxes, which Ken Ofori-Atta describes as a “bad reflection” on the country in comparison to other middle-income countries.
“As of August 2021, only 2,364,348 people are bearing the burden of the entire population as taxpayers,” he said in his budget address to Parliament on Wednesday. The Minister contrasted this figure with the 17 million registered voter population, which indicates the number of Ghanaians aged 18 and up.
Mr. Ofori-Atta emphasized that this is a trend that must be addressed in order to “create a more equitable society.” In addition, the Minister stated that just 45,109 businesses are registered as corporate taxpayers. According to the Minister, just 54,364 people are registered as self-employed taxpayers at the Ghana Revenue Authority, and only 136,198 entities are registered enterprises at the Registrar General’s as of August 2021, with 80 percent of them being self-employed.
According to the numbers supplied by the Finance Minister, the Greater Accra Region will contribute about 90 percent of Ghana’s domestic tax by June 2021. The Greater Accra Region has contributed an average of 89 percent during the last three years. “The Ashanti, Western, and Eastern areas collectively contribute less than 3% of domestic taxes,” he noted.
Mr. Ofori-Atta asked the government to make the commitment that “by the next census, we should have improved these numbers to become an Upper Middle-Income Country in accordance with our Ghana Beyond Aid program.”
“We must exceed a 20% revenue-to-GDP ratio threshold by 2024,” he stated as a goal.
Mr. Ofori-Atta stated earlier in the budget presentation that this will need “sharing the burden so that every adult Ghanaian contributes to the delivery of key infrastructure, social services, and the improvement of lives.” “This revenue mobilization must be a collaborative endeavor, and we must all participate to make it a reality,” he said.