Accra, Ghana – The immediate past Finance Minister, 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 instead of the initially targeted 2027.
Speaking in Parliament, Dr. Amin Adam highlighted that the previous administration had made significant strides in improving tax revenue, increasing the tax-to-GDP ratio from 13.8% in 2022 to 17% by the end of 2024. He argued that achieving an additional 1% increase within a year is realistic, given past performance and the existing digital tools for revenue collection.
“I want to invite the new Minister for Finance to continue to pursue these policies and measures to achieve the tax-to-GDP ratio of 18% this year and not 2027. Because that is possible and that can be done. If we have done it from 2022 to 2024 by about 3.2 percentage points, then it should be possible for them to be able to achieve it if we have to do 1 percentage point this year,” he stated.
Dr. Amin Adam credited digitalization initiatives for the significant revenue growth, particularly digital solutions such as the Ghana.gov payment platform, the Electronic Invoicing for VAT (E-VAT), and the Integrated Customs Management System (ICOMS). According to him, these digital platforms have enhanced both revenue collection and compliance, contributing to a sharp increase in tax revenue from GHS 75 billion in 2022 to GHS 154 billion in 2024.
The Role of Digitalization in Tax Growth
The former minister emphasized that continued investment in digital tax collection systems would ensure sustained revenue growth. He outlined key measures needed to enhance tax compliance and efficiency, including:
Faceless Tax Assessment and Filing: Encouraging electronic filing to eliminate human interference and potential corruption.
Digital Tax Records: Ensuring that businesses and individuals maintain accurate digital records for transparency.
Simplified Tax Audits: Using digital tools to streamline tax audits and improve compliance.
He also urged the new administration to prioritize the implementation of the I-Tax system, which is designed to automate tax processes and further boost revenue generation.
Support for Local FINTECH Companies
Dr. Amin Adam further encouraged the government to support local financial technology (FINTECH) companies by sourcing digital solutions domestically rather than relying on foreign providers. He noted that Ghanaian FINTECH companies had played a crucial role in the country’s tax digitalization efforts over the past three years and should be given more opportunities to develop and implement innovative tax solutions.
“I want to encourage them also to come out with a local content policy that would guide the utilization of local FINTECH companies rather than sourcing these solutions from abroad,” he said.
A Call for Continued Digitalization
The former finance minister remarked that President John Dramani Mahama’s recent comments at the Africa Prosperity Dialogue, where he acknowledged the crucial role of digitalization in Africa’s economic transformation aligns with his proposal.
Dr. Amin Adam, however, credited Vice President Dr. Mahamudu Bawumia for championing Ghana’s digital transformation in recent years.
As the new administration takes over, the debate over Ghana’s tax-to-GDP ratio and the pace of its economic reforms is expected to continue. Dr. Amin Adam’s call signals the importance of maintaining digital reforms to sustain revenue growth and economic stability.
Source: Clement Akoloh
