The Government has reaffirmed its commitment to increasing domestic revenue without imposing new taxes, saying improved compliance, digital innovation and stronger tax administration, not higher tax rates, will drive revenue mobilisation in the second half of 2026.
The Finance Minister, Dr. Cassiel Ato Forson, said the government remains on course to increase non-oil tax revenue from 13.1 percent of Gross Domestic Product (GDP) in 2025 to 14.1 percent in 2026 through broadening the tax base and improving efficiency in tax collection.
According to him, the strategy marks a shift from revenue mobilisation through new tax handles to one built on compliance, technology and administrative reforms.
“On the revenue side, the Government is targeting an increase in non-oil tax revenue from 13.1 percent of GDP in 2025 to 14.1 percent of GDP in 2026 through improved compliance, broader tax bases and enhanced revenue administration – and not through higher tax rates,” the Finance Minister stated.
Dr. Forson said the policy direction is already yielding positive results, pointing out that despite abolishing several taxes earlier this year, the government recorded stronger revenue performance in 2025.
He noted that non-oil tax revenue increased from 12.6 percent of GDP in 2024 to 13.1 percent in 2025 after the abolition of what he described as “nuisance taxes,” including the Electronic Transfer Levy (E-Levy), the Betting Tax, the COVID-19 Health Recovery Levy, the Emissions Levy and Value Added Tax (VAT) on motor insurance.
“Government collected more revenue in 2025 even after abolishing the nuisance taxes,” he said, attributing the outcome to better tax administration and stronger compliance rather than tax increases.
The Minister explained that the government had also undertaken the first comprehensive VAT reforms since 2015 to simplify the tax regime, eliminate distortions and support businesses while improving compliance.
Among the reforms announced were the reduction of the effective VAT rate from 21.9 percent to 20 percent, the decoupling of the Ghana Education Trust Fund (GETFund) Levy and National Health Insurance Levy from the VAT base to allow input tax deductions, the abolition of VAT on mineral reconnaissance and prospecting activities, and the increase in the VAT registration threshold from GH¢200,000 to GH¢750,000 to ease the burden on thousands of micro and small businesses.
He said the government has also extended the zero-rating of locally manufactured textiles to 2028.
Dr. Forson stressed that beyond legislative reforms, technology will play a central role in improving revenue collection.
He disclosed that the cross-border technology solution designed to collect VAT from non-resident digital platforms was successfully piloted in April 2026 and is now awaiting regulatory approval for nationwide rollout.
When fully deployed, the system is projected to generate about GH¢2.3 billion in its first full year of operation, with revenue expected to grow by about 20 percent annually.
According to the Finance Minister, the initiative will ensure that foreign digital platforms generating income from Ghanaian consumers contribute their fair share of taxes without increasing tax rates for local businesses and individuals.
Government is also rolling out Fiscal Electronic Devices to strengthen VAT compliance and improve monitoring of taxable transactions.
The pilot phase, he said, is at an advanced stage, while a VAT Reward Scheme will be introduced to encourage consumers to demand VAT invoices during purchases.
Under the scheme, customers who obtain valid VAT invoices will qualify for periodic rewards, a move the government believes will encourage voluntary compliance and reduce tax evasion.
Dr. Forson said the reforms are aimed at addressing significant leakages in the VAT system, revealing that Ghana currently loses an estimated 60 percent of its potential VAT revenue due to non-compliance and systemic inefficiencies.
He called on Parliament to support the government’s efforts to clamp down on businesses and individuals who collect VAT from customers but fail to remit the funds to the state.
Similarly, the Excise Duty Bill proposes reforms to improve the taxation of wines, spirits and other excisable products, which the government says have long suffered from widespread tax leakages.
He said the administration’s approach is designed to strengthen public finances while supporting business growth, protecting jobs and sustaining the country’s ongoing economic recovery.
By Ernest Kofi Adu, Parliament House