Proposed Domestic Revenue Mobilization Policies under the IMF Extended Credit Facility

Proposed Domestic Revenue Mobilization Policies under the IMF Extended Credit Facility

June 12, 2023

The Government of Ghana is taking steps to address the challenges of domestic revenue mobilization and achieve the objectives of the IMF Extended Credit Facility Program. The government is preparing a Medium-Term Revenue Strategy (MTRS) that will focus on tax policy and revenue administration measures necessary to reach the government’s revenue objectives over the 2023-2026 period.

The MTRS will be published by the end of September 2023, after cabinet approval and public consultations. The IMF’s Fiscal Affairs Department will provide technical assistance in designing the MTRS, and the government will organize public consultations to ensure that the objectives and means of the MTRS are shared and understood.

The IMF’s Fiscal Affairs Department’s tax diagnostic mission identified several potential measures to sustainably generate significant revenue while addressing efficiency and equity concerns. These measures include removing Value Added Tax (VAT) exemptions, reforming corporate income tax, reducing customs exemptions, increasing progressivity in personal income taxes, automatically adjusting fuel levies by exchange rate movement or inflation, and adopting the new fiscal regime for the extractive industries.

To implement these measures, the government intends to roll out a series of reforms over the next few years. These reforms include preparing and publishing annual tax expenditure reports to promote accountability and transparency in revenue management, strengthening VAT compliance, finalizing the new fiscal regime framework for extractive industries, and increasing compliance of e-commerce. The government also plans to complete the procurement process of the Integrated Tax Administration System (ITAS) and increase online filing and payment of taxes through the Ghana Integrated Tax Management Information System (GITMIS).

The e-VAT invoicing system will be used as a certified invoicing system for operations by the end of 2024, and all registered taxpayers will be onboarded at the same time. The government also seeks to fast-track the establishment and operationalization of APIs with relevant third-party data entities to strengthen existing data sharing arrangements. It is essential for businesses operating in Ghana to stay informed about these developments and how they may impact their operations. We will continue to monitor these developments and provide updates on any significant changes. If you have any questions or concerns, please do not hesitate to contact us.