The Minister for Gender, Children and Social Protection, Dr. Agnes Naa Momo Lartey, has stated that taxes are more than instruments of fiscal policy; they are the foundation of the social contract between the state and its citizens.
She stated this at the National Tax Forum 2025 in Accra, organized by Revenue Mobilization Africa (RMA) in partnership with the Ghana Integrity Initiative (GII), Trade Union Congress (TUC), and the Ghana Revenue Authority (GRA).
“When designed equitably, tax systems redistribute wealth, reduce poverty, and finance programs that guarantee dignity and security for all” she added.
She noted that, social protection initiatives in Ghana, such as the Livelihood Empowerment Against Poverty (LEAP), the School Feeding Programme, Free Senior High School, Capitation Grant, and the National Health Insurance Scheme (NHIS) have had measurable impacts on human capital development and poverty reduction. Adding that these programs face sustainability challenges due to fiscal pressures and competing expenditure needs over the limited public resources.
Adding that, Ghana’s tax-to-GDP ratio remains below 14%, far short of the Africa Union benchmark of 20% and the Organization for Economic Co-operation and Development (OECD) average of 34%.
“At the same time, over 60% of our domestic revenues come from indirect taxes such as VAT, fuel levies, and excise duties creating regressive tendencies where low-income households bear a disproportionate share of the tax burden. This limits the redistributive role of taxation and raises urgent questions about tax equity” she emphasized.
Dr Naa Momo, gave out key policy imperatives for Promoting tax equity.
“Broadening the Tax Base through Inclusive Formalization with nearly 70% of Ghana’s labor force in the informal sector, the current tax structure excludes a large segment of potential taxpayers. Hence, formalization strategies must go beyond enforcement to include simplified presumptive tax regimes, digital ID systems, and mobile-based payment platforms that make compliance less burdensome. By integrating informal businesses gradually, we can expand the tax base while preserving livelihoods” she noted.
She added that, Ghana must move towards a more progressive tax regime where those with higher capacity contribute more.
“A stronger reliance on personal income tax, property tax, capital gains, and wealth-related levies will align with the ability-to-pay principle. At the same time, exemptions and tax holidays for high-net-worth corporations must be rationalized to avoid undue revenue losses” she emphasized.
The Minister Reaffirmed Ministry’s commitment to ensuring that tax policy reforms translate into tangible improvements in social protection delivery.
“Together, let us work towards a tax system that is progressive, transparent, and socially responsive” she noted.
Grace Acheampong, ISD
