Dr Mahamudu Bawumia, Vice President and presidential candidate of the New Patriotic Party (NPP), outlined a comprehensive tax reform proposal during a national address at the University of Professional Studies (UPSA) on February 7, 2024. In his speech, he criticized the Ghana Revenue Authority (GRA) for its current methods, citing harassment of businesses and the need for a more efficient tax system.
Dr Bawumia expressed concern about the pressure placed on GRA staff to collect revenues, leading to the monitoring of sales in shops and constant audits, which many businesses find burdensome. He emphasized the importance of striking the right balance between revenue collection and allowing businesses to thrive, stating, “Our job is to protect the productive forces.”
To address the existing issues, Dr Bawumia proposed a flat tax regime for individuals and Small and Medium-sized Enterprises (SMEs), constituting 98% of all businesses in Ghana. He highlighted the need for a regime that is easy to understand, comply with, and enforce, reducing discretion to minimize corruption.
As part of the proposed tax reform, Dr. Bawumia announced a tax amnesty for individuals and businesses for failures to file taxes in previous years, allowing a fresh start. He also emphasized the implementation of tax digitalization, requiring electronic filing through mobile phones or computers, with faceless assessments to enhance transparency and accountability.
Furthermore, the Vice President outlined plans to extend e-invoicing to all companies, taking inspiration from successful models in Estonia, India, and Mexico. Audits by GRA would be conducted electronically and facelessly, and entities would not undergo audits more than once in five years unless anomalies persist.
Addressing disputes about tax assessments, Dr Bawumia proposed binding arbitration through a body constituted by institutions such as the Ghana Arbitration Center, Institute of Taxation, AGI, Institute of Chartered Accountants, PEF, and Ghana Employers Association, with a mandate to resolve any appeal within a maximum of three months.
Dr Bawumia concluded by stating that the proposed tax reform, coupled with cuts in government expenditure and private sector involvement, would create a different fiscal landscape in 2025. He asserted that the measures implemented thus far have outperformed the IMF fiscal deficit target, providing the fiscal space to eliminate certain taxes without compromising deficit targets.
