Kumasi: The Green Tax Youth Africa (GTYA), a tax advocacy group, has commended the government for introducing the modified tax system to improve taxation compliance and revenue collection in the informal sector. Mr. Benaiah Nii Addo, Executive Director of GTYA, praised the initiative as a strategic effort to address Ghana's long-standing revenue mobilisation gap in the informal sector.
According to Ghana News Agency, Mr. Addo shared his views in an interview in Kumasi regarding the newly introduced Modified Tax System by the government through the Ghana Revenue Authority (GRA). The system taxes workers in the informal sector with turnovers below GhS 20,000, between GhS25 and GhS45, while those with turnovers from GhS20,000 to GhS500,000, are taxed three per cent of their turnovers. This strategy aims to ensure fairness in domestic revenue mobilisation for workers in the informal sector while easing the burden on the formal sector.
Mr. Addo described the initiative as timely and progressive, noting that over 80 per cent of Ghana's revenue potential is tied to the informal sector. He envisioned significant transformation in Ghana's fiscal space and development path if the new system is properly implemented and supported. "The informal sector remains the bedrock of Ghana's economy and revenue potential. Strengthening tax administration will enhance compliance in this space and can significantly close the fiscal gap and drive inclusive development," Mr. Addo added.
He commended the GRA for its strong governmental response to a persistent call from stakeholders to widen the tax net for equity and inclusive domestic revenue mobilisation. Mr. Addo also called on Civil Society Organisations, academia, private sector leaders, and international development partners to support the government in building a more equitable and fiscal framework grounded in justice, efficiency, and sustainability.
He urged the government to study the performance of the Modified Tax System for constant review, suggesting that if it does not achieve its purpose within six months of implementation, it should be re-evaluated. "Taxes must be progressive for everyone to pay their fair share towards national development," Mr. Addo stated.