Ghana’s Tax Gap: New Levies Loom In Mid-Year Budget

Ghana's economic performance in 2025 showed significant improvements, with inflation dropping from 23.8% to 3.8%, the cedi appreciating by 40.7% against the dollar, and a GDP growth rate of 6.0%, marking the strongest growth in six years. However, the Bank of Ghana's May 2026 report reveals a troubling fiscal situation: government spending is outpacing revenue collection, leading to an inevitable need for new taxes in the upcoming mid-year budget. By March 2026, total revenue and grants amounted to only 3.6% of GDP, with tax revenue at just 3.0%. In contrast, government expenditures reached 3.9% of GDP, indicating a deficit in the first quarter of the year. Despite a growing economy, with a real GDP growth of 5.8% in Q4 2025, the tax system is failing to capture sufficient revenue. The current tax revenue is running at an annualized rate of approximately 12% of GDP, which is below the previous year's figure of 13.1%. This discrepancy raises concerns about the sustainability of Ghana's fiscal health as economic activity continues to expand without corresponding tax growth.