The head of Ghana’s revenue authority says tax contribution from the informal sector contributes just 1% to tax revenue

The Commissioner-General of the Ghana Revenue Authority (GRA), Emmanuel Kofi Nti, has disclosed that the Ghanaian informal sector contributes just one percent to the total tax revenue.

Commissioner-General of GRA, Emmanuel Kofi Nti

He said that since they do not have reliable data to capture individuals and businesses in the informal sector, “Our closest that we take for [the] informal [sector] is [the] self-employed and that is where our performance will goof. Prof. [Eugenia Amporfu] talked about 2 percent but what we have is just 1 percent, it is even worse”.

He said this at a forum organized by the Danquah Institute Economic Forum on the theme: ‘Bridging the gap between the formal and informal economy, the role of domestic revenue mobilisation in an era of Ghana Beyond Aid’.

He explained that the total tax revenue for the informal sector is mainly captured under the self-employed category, which makes “just about a percentage” of total tax revenue.

However, according to the Ghana Statistical Service’s, the informal sector is made up of businesses – across all sectors – which are not registered with the Registrar-General’s Department (RGD) and do not keep formal accounts.

Meanwhile, the informal sector is estimated to be more than 60 percent of the country’s economy. This means that a greater amount of Ghana’s revenue could have been harnessed from that sector if collected.

In a related development, the GRA is targeting 4 million Tax Identity Number (TIN) registrations by the end of 2019.

Mr Nti was hopeful they would meet the target also because the TIN registration by 2018 has doubled as against the 1 million recorded in 2017.

“As of December 2017, people on the TIN were 1,170,384. However, by the end of December 2018, we had moved to just 364 away from 2 million. So, when you look at it critically, we have doubled the number of people on the TIN.”

He added that the vision of the GRA in 2019 “is to also, again, double that TIN. So, our target for that area is 4 million”.

This, he said, will help the GRA generate more domestic revenue for the country.

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