VAT Reform Drive Tax Surge Toward 15% Target
Ghana is targeting a tax-to-GDP ratio of 15% by the end of 2026, with government banking on sweeping value-added tax (VAT) reforms and artificial intelligence-powered customs enforcement to drive a sustained increase in revenue mobilisation.
Finance Minister Cassiel Ato Forson announced the projection at the Ghana-UK Investment Summit, stating that VAT reforms, alongside digital enforcement tools at the ports, will play a central role in strengthening fiscal performance.
He explained that the VAT overhaul, which includes the rollout of electronic point-of-sale devices in July, is expected to boost VAT collections by at least 20% once fully implemented. The system is designed to reduce compliance gaps, improve transparency in retail transactions, and enable real-time monitoring of sales activity across the economy.
According to the minister, the reform is part of a broader rationalisation of Ghana’s tax structure, including the removal of overlapping sales tax and VAT distortions that previously created inefficiencies in revenue collection.
“Our VAT system was distorted. We are correcting that and making it more efficient,” he said.
The reforms form part of government’s broader fiscal consolidation strategy following the 2022 debt crisis and subsequent restructuring programme, which exposed weaknesses in revenue mobilisation and expenditure controls.
In parallel, Ghana has introduced artificial intelligence systems at the country’s ports to improve customs valuation and reduce revenue leakages linked to under-invoicing and discretionary pricing.
Dr. Forson said the AI-driven system standardises valuation benchmarks and removes inconsistencies in import pricing, generating an estimated additional $3 million per day in customs revenue, equivalent to nearly $1 billion annually.
He added that digitalisation of customs operations is now a core pillar of Ghana’s revenue recovery strategy, strengthening efficiency while reducing opportunities for corruption and revenue losses.
The VAT and customs reforms are expected to support Ghana’s medium-term objective of increasing the tax-to-GDP ratio from current levels to 15%, thereby reducing reliance on domestic borrowing and improving fiscal sustainability.
The remarks were delivered alongside Governor of the Bank of Ghana, Dr. Johnson Pandit Asiama, who highlighted complementary monetary policy and financial sector reforms aimed at stabilising inflation, strengthening the currency, and restoring investor confidence.
Dr. Asiama said tighter monetary policy and liquidity management had helped stabilise the economy, even as recent global oil price shocks and geopolitical tensions created renewed inflationary pressures.
He added that improved reserve accumulation and financial sector reforms have strengthened macroeconomic buffers, creating space for private sector credit expansion.
The Finance Minister also outlined expenditure controls, including tighter oversight of state-owned enterprise commitments and reduced public spending, which he said had helped lower government expenditure from 18.7% of GDP to 13.5% without undermining growth.
Non-oil GDP growth, he noted, increased from 6.1% to 7.6% over the same period, reflecting stronger underlying economic activity despite fiscal tightening.
Together, the reforms signal a shift toward a more digital, rules-based fiscal framework aimed at improving revenue efficiency, strengthening macroeconomic stability, and supporting long-term investment inflows.
“The goal is simple,” Dr. Forson said. “Stability that lasts.”
