Govt to initiate Data cleansing exercise to increase revenue mobilisation- Dr. Ampaabeng

By Daniel NONOR, Accra

The Deputy Minister of Finance, Dr. Alex Ampaabeng, has announced a major initiative to improve revenue mobilization by working closely with the Ghana Revenue Authority (GRA) on a comprehensive data cleansing exercise.

The move is part of a broader strategy by the government to build a fit-for-purpose revenue system that aligns with the evolving dynamics of the business community in the country.

Speaking at the launch of the 8th World Bank Ghana Economic Update, the Deputy Minister highlighted the introduction of the Ghana National Revenue Policy in 2023 and the subsequent Medium Term Revenue Strategy as key initiatives aimed at establishing a robust and sustainable revenue collection framework.

“Currently, we are actively working with the Ghana Revenue Authority on data cleansing,” the Deputy Minister stated.

However, he noted that a major challenge to revenue collection has been accurately identifying taxpayers, their locations, and business ownerships.

“As of now, we have about 7.4 million eligible taxpayers in our database, with approximately 9 million active taxpayers and 5.4 million inactive taxpayers. Our goal is to have accurate data on who is doing what and where,” he said.

He explained that the digitization of address systems in the country and the integration of the Ghana Card with bank accounts and businesses have significantly improved the ability to assess taxpayers accurately, stressing that in the past, the GRA faced criticism for repeatedly auditing a limited number of taxpayers due to a constrained database.

This new data-driven approach is set to change that narrative.

“This effort is part of our responsibility to ensure a sustainable revenue system, a requirement under the IMF program. We are building this system ourselves to ensure a strong fiscal position. There are ongoing works at the ports and the implementation of the e-VAT system. So far, we have onboarded close to 700 companies, contributing 80% of our revenue,” he said.

The Deputy Minister also revealed that the mid-year budget would not introduce any new taxes, emphasizing the government’s commitment to supporting businesses.

Additionally, for the first time in many years, there will be no supplementary budget, reflecting the government’s resolve to maintain fiscal discipline.

“Our spending is likely to be revised downwards,” the Deputy Minister noted.

“As a ministry, we have a responsibility to protect our country and maintain a sustainable fiscal path.

“We aim to make Ghana not just a gateway but also a destination for investment.

“Revenue leakages, whether due to under-collection or inefficiencies, have been significant issues.

“However, numerous reforms are underway to address these challenges.”

He further emphasized the government’s proactive approach to revenue mobilization and fiscal management, adding that the collaboration with the GRA on data cleansing is a crucial step towards creating a more efficient and equitable tax system.

The Ghana Economic Update states that Ghana’s tax revenue is significantly lower than other Sub-Saharan African countries and those with similar income levels, indicating systemic inefficiencies in tax policy and compliance, hindering macroeconomic stability and long-term growth of the country.

The report indicated key issues including a complex personal income tax (PIT) system with many exemptions, insufficient enforcement, and over-reliance on payroll taxes.

It stated, for instance, that only 25% of adults pay Pay As You Earn (PAYE) taxes, and PIT constitutes just 2% of GDP compared to SSA averages.

The World Bank has thus recommended improvements, including broadening the tax base, revising income definitions, and enhancing enforcement.