Ghana’s tax revenue is expected to grow strongly this year and the next five years, the International Monetary Fund April 2023 Fiscal Monitor Report has revealed.
According to the report, the country’s tax revenue to Gross Domestic Product (GDP) is estimated at 17.2% in 2023. This is from 15.6% recorded in 2022.
Per the figures, the country’s tax-to-GDP ratio will inched up to 17.9% in 2024 and then expand further to 18.4% in 2025. It will subsequently inched up to 18.7% in 2026 and remain stable in 2027 and 2028 respectively.
This will almost push the tax revenue to the Sub Saharan Africa average of about 20% of GDP.
In 2023, the Ghana Revenue Authority (GRA) exceeded its tax revenue target of ¢71.94 billion.
It collected ¢3.6 billion more than the 2022 target, representing a nominal growth of 31.5% over the tax revenue collected in the 2021 fiscal year.
The government recently introduced three new taxes – Income Tax Amendment, Growth and Sustainable and the Excise Amendment, all intended to shore up the nation’s tax revenue.
The Ministry of Finance justified the new proposed taxes, indicating, it will shore up revenue domestically and boost Ghana’s fiscal position following the shocks of Covid-19 and the Russian/Ukraine war.
Expenditure to remain almost same
Meanwhile, government expenditure to GDP is estimated to remain almost same between 2023 and 2028.
In 2023, the IMG projects government expenditure to GDP at 24.5% of GDP, a drop from 25.8% recorded in 2022.
It will however shoot up to 26.4% of GDP in 2024, but will fall to 25.8% in 2025, 24.6% in 2026 and 24.0% in 2027. It will then remain stable at 24.1% of GDP in 2028.
Comparatively to its peers on the African continent, Ghana’s expenditure is one of the highest in Sub-Saharan Africa.