In a bold move to tackle fiscal mismanagement, Ghana’s Finance Minister Cassiel Ato Forson addressed Parliament, revealing a shocking abuse of the Tax Refund Account. A study spanning eight years uncovered that out of GH¢29.11 billion accrued, only 43% (GH¢12.5 billion) was used for tax refund purposes, while a staggering 57% (GH¢16.6 billion) was misapplied.
This blatant violation of the Revenue Administration Act, 2016 (Act 915) and the Public Financial Management Act, 2016 (Act 921) prompted the government to reduce the tax refund ceiling from 6% to 4% of Total Revenue. This decisive action is expected to yield significant savings, with an estimated GH¢3.8 billion saved in 2025 alone.
The Minister emphasized that this amount is sufficient to offset the revenue shortfall resulting from the removal of the E-Levy (GH¢1.9 billion) and the Betty Tax (GH¢180 million). By “stopping the bleeding,” the government aims to improve tax revenue, net of tax refunds, by 2%, representing 0.3% of GDP.
Additionally, the government plans to amend the Revenue Administration Act, 2016 (Act 915), and introduce measures to strengthen the legal and regulatory regime for Non-Tax Revenues. These reforms aim to improve service delivery, enhance revenue mobilization, and promote fiscal sustainability.
Source: Sankofaonline.com
