Informal sector workers ready to pay taxes, but demand transparency — BudgIT report
Ghana’s efforts to widen its tax net are facing resistance rooted in mistrust, systemic complexity, and social inequities, despite a general willingness among informal sector workers to comply, according to a new report released by BudgIT Ghana.
The report, titled ‘Ghana’s Untapped Economy: Analysis of Tax Compliance Behaviour of Informal Sector Workers in the Greater Accra Region,’ was compiled in collaboration with the Society for Women in Taxation Ghana and the International Budget Partnership (IBP).
Findings from the research reveal that the informal sector, which accounts for over 80 percent of Ghana’s workforce, remains largely untaxed, not because of outright resistance, but due to deep-rooted distrust in government institutions, inconsistent income patterns, and a complicated and inaccessible tax system.
“There is strong interest among informal workers to pay taxes, but they want to see value for money and a system that works for them, not against them,” said Jennifer Moffatt, Country Manager for BudgIT Ghana, during the report’s presentation in Accra.
Lack of Trust and Visibility
A key theme from the study is the perception of corruption and mismanagement of tax revenue. Many workers say they see no visible benefits from taxes paid, no improved roads, healthcare, or infrastructure. This has created a crisis of confidence, with many preferring to pay levies to local authorities rather than to the Ghana Revenue Authority (GRA).
The complexity of the tax registration and filing processes also acts as a barrier, especially for people with low levels of formal education or no access to reliable digital tools.
Women Bear the Heavier Burden
The report highlights gender disparities in tax enforcement and impact. Women in the informal economy, who form a large segment of the sector, face higher indirect tax burdens, more frequent enforcement visits, and limited flexibility to pay due to household responsibilities and caregiving roles.
“Female entrepreneurs often have to choose between meeting tax obligations and meeting family needs. Many also report harassment by enforcement agents,” said Esi Sam, Chairperson of the Society for Women in Taxation.
Recommendations and the Way Forward
Despite the challenges, BudgIT Ghana’s study found significant willingness among informal workers to comply, but only if the tax system becomes more transparent, equitable, and accessible.
Among the key recommendations are:
• Simplified tax registration and filing processes, especially via mobile and decentralized platforms.
• Introduction of mobile money and USSD-based tax payment options to make compliance easier and more flexible.
• Gender-sensitive tax reforms, including protection from harassment, flexible tax plans for caregivers, and better engagement with women’s associations.
• Enhanced public communication and feedback systems to rebuild trust and educate citizens on how tax revenues are used.
The report comes as the Ghana Revenue Authority (GRA) prepares to roll out a modified taxation system for informal sector workers on July 1, introducing fixed quarterly taxes for small earners and turnover-based taxation for those above GHS 20,000.
