By Buertey Francis BORYOR
The Greater Accra Chairman of the Association of Ghana Industries (AGI), Tsonam Akpeloo, has urged government to broaden the country’s tax base to ensure a fairer distribution of the tax burden.
Speaking at the 2025 Post-Budget Forum webinar hosted by LIMA Partners, Akpeloo noted that the country’s tax-to-GDP ratio remains low- hovering around 13.6 percent to 13.8 percent, when it should be closer to 18 percent or 20 percent.
“Broadening the tax base would reduce the burden on businesses. We need to do more as a country to expand the tax basket. Right now, those who pay taxes dutifully end up being targeted for more taxes, which discourages compliance,” he said.
Additionally, he stressed that government must find ways to bring the informal sector into the tax net, as many businesses operating in that space are making significant profits but remain untaxed.
He suggested that leveraging technology could help track and collect taxes more efficiently. “During the rollout of the Ghana Card, we were told it would improve tax collection. But I do not think that is happening as expected,” he noted.
Addressing the issue of tax refunds, Akpeloo pointed out that the process is too complicated, discouraging businesses from claiming what they are owed.
“The reduction of the tax refund rate from 6 percent to 4 percent is understandable, considering that only about 43 percent of businesses have been claiming it. But the reality is that the process is frustrating. It feels like once the Ghana Revenue Authority (GRA) collects money, giving it back becomes almost impossible,” he said.
According to him, many business owners are too busy to go through the lengthy and complex refund procedures. He is therefore urging government to simplify the process to ensure that all eligible businesses can access their refunds easily.
AGI’s view on the 2025 budget
Despite these challenges, Akpeloo stated that AGI is generally satisfied with the 2025 Budget, particularly the removal of certain taxes such as the e-levy and emissions levy.
“Some of the taxes we have always asked to be removed have actually been taken off, so in that regard, we are happy. However, there is still more work to be done to ensure fairness in the tax system,” he said.
He also said that the VAT structure, which puts local industries at a disadvantage is one of AGI’s major concerns.
“VAT is supposed to be a consumption tax, but right now, we pay 21 percent on inputs and only recover 15 percent on outputs. That 6 percent gap is a huge burden on industries, especially those dealing with large volumes of production,” he explained.
He called on the government to review the VAT regime and create a system that does not unfairly affect manufacturers.
Another issue raised by Akpeloo was the cost of importing raw materials, which he said undermines the push for a 24-hour economy and major challenge for local industries.
“We import about 70 percent of the raw materials we use in manufacturing. If we want to move towards a 24-hour economy, we must create an environment where local industries can thrive,” he stated.
Furthermore, he proposed that the government separate import duties for raw materials from those for finished products.
“If you’re importing sugar to sell in a shop, that’s a finished product and should be taxed differently from sugar imported for beverage production. We need to be intentional about supporting local industries,” said.
The economic context of the 2025 budget
The country is currently implementing an IMF-supported Extended Credit Facility program, approved in May 2023, to restore economic stability following high inflation, cedi depreciation, and a severe financial crisis.
The new government, led by President John Mahama, has introduced several tax cuts to ease pressure on businesses and households. The 2025 Budget reflects this policy shift, balancing tax reliefs with alternative revenue collection strategies.
However, while businesses welcome these changes, industry leaders like Akpeloo insist that lasting economic stability will only be achieved if the tax base is widened, tax procedures are simplified, and local industries are given the right support to grow.
