The immediate past Minister for Finance, Dr. Mohammed Amin Adam, has urged his successor, Dr. Cassiel Ato Forson, to leverage digitalization to achieve Ghana’s projected 18% tax-to-GDP ratio by the end of 2025—two years ahead of the initially targeted 2027.
In a statement in Parliament, Dr. Amin Adam emphasized that the previous administration had significantly improved tax revenue, increasing the tax-to-GDP ratio from 13.8% in 2022 to 17% by the close of 2024. He argued that raising it by an additional 1% within a year is feasible, given past progress and the efficiency of existing digital revenue collection tools.
“I urge the new Minister for Finance to continue pursuing these policies to achieve the 18% tax-to-GDP ratio this year rather than in 2027. If we could raise it by 3.2 percentage points between 2022 and 2024, then increasing it by just 1 percentage point within a year is entirely possible,” he stated.
Digitalization Driving Revenue Growth
Dr. Amin Adam credited the surge in tax revenue to digitalization initiatives, including the Ghana.gov payment platform, the Electronic Invoicing for VAT (E-VAT), and the Integrated Customs Management System (ICOMS). These platforms, he noted, have enhanced revenue collection and compliance, contributing to an increase in tax revenue from GHS 75 billion in 2022 to GHS 154 billion in 2024.
To sustain this momentum, he outlined key digital-driven tax measures that should be prioritized:
- Faceless Tax Assessment and Filing: Encouraging electronic tax filing to minimize human interference and corruption.
- Digital Tax Records: Mandating businesses and individuals to maintain accurate digital tax records for transparency.
- Simplified Tax Audits: Utilizing digital tools to streamline audits and improve compliance.
He also urged the new administration to accelerate the implementation of the I-Tax system, designed to automate tax processes and further boost revenue generation.
Supporting Local FINTECH Companies
Dr. Amin Adam advocated for greater support for Ghanaian financial technology (FINTECH) firms, calling on the government to prioritize local providers over foreign solutions. He emphasized that local FINTECH companies had played a vital role in Ghana’s tax digitalization efforts and should be given more opportunities to develop and implement innovative tax solutions.
“I encourage them to introduce a local content policy to ensure that Ghanaian FINTECH companies are at the forefront of our digital tax transformation rather than outsourcing these solutions abroad,” he said.
Digitalization as a Key Economic Driver
The former minister’s call for continued digitalization aligns with recent remarks by former President John Dramani Mahama at the Africa Prosperity Dialogue, where he acknowledged digitalization as a key driver of Africa’s economic transformation. However, Dr. Amin Adam credited Vice President Dr. Mahamudu Bawumia for championing Ghana’s digital shift in recent years.
As the new administration takes charge, the debate over Ghana’s tax-to-GDP ratio and the pace of economic reforms is expected to intensify. Dr. Amin Adam’s remarks highlight the critical role of digitalization in sustaining revenue growth and ensuring long-term economic stability.
Source: GhanaNewsOnline