Accra: Ghana can raise substantial additional domestic revenue by improving Value Added Tax and corporate income tax compliance, the Tax Justice Coalition-Ghana has said. The Coalition stated that closing existing tax gaps could generate more revenue without introducing new taxes or increasing existing tax rates.
According to Ghana Web, Benedict Doh, National Coordinator of the Tax Justice Coalition-Ghana, emphasized in an exclusive interview that revenue mobilization efforts should focus on broadening the tax base and enhancing compliance rather than imposing additional tax burdens on citizens and businesses. Doh, who also coordinates the Tax Justice Platform and works with Transparency International Ghana, highlighted significant opportunities to mobilize more domestic resources through VAT and corporate income tax.
Doh pointed out that available studies indicated substantial gaps within the VAT and corporate income tax regimes, suggesting that considerable revenue remained uncollected under the existing tax framework. He advocated for improving tax administration, strengthening compliance, and bringing more taxable economic activities into the formal tax system to increase domestic revenue for the government.
Broadening the tax base, according to Doh, remains one of the more sustainable approaches to domestic revenue mobilization. This strategy could support Ghana's development financing needs without placing additional pressure on existing taxpayers. However, he identified illicit financial flows (IFFs) as a significant challenge to revenue mobilization, noting that the movement of illicit funds out of the country deprives the state of resources essential for public services like infrastructure, education, and healthcare.
Doh also stressed the need for greater transparency and accountability in granting tax exemptions. He referenced the Tax Exemptions Act passed in 2022, which mandates the publication of annual tax expenditure reports detailing the value of tax exemptions granted. The Act also requires cost-benefit analyses to ensure that the economic benefits of tax incentives justify the revenue forgone by the government.
Furthermore, Doh called for increased disclosure of beneficial ownership information on companies receiving tax exemptions. On tax equity, he advocated for reforms that promote fairness and prevent worsening existing social and economic inequalities. The Coalition continues to urge attention to the gender dimensions of taxation to ensure tax policies do not disproportionately affect women and vulnerable groups, as poorly designed tax policies could deepen societal inequality.