Germany and Switzerland support Ghana's Tax Reforms

Germany and Switzerland have jointly committed approximately Euros 9 million to support reforms in tax policy and tax administration in Ghana. A memorandum of understanding (MOU) to this effect has been signed between the Ministry of Finance and Economic Planning and the two development partners: the Deutsche Gesellschaft für Technische Zusammenarbeit (GTZ) and the Swiss State Secretariat of Economic Affairs (SECO).

Over the last decade Ghana's tax policy and administration framework has seen reforms which have come with the introduction of value-added tax and revised income tax scheme. These have led to the doubling of the tax to GDP ratio to 21.38% and a change in tax structure towards taxation of consumption. However, the tax base needs to be widened and the tax net broadened. Additionally Ghana’s tax system must induce investments and improve the business climate while ensuring efficiency in tax collection.

It is these challenges that have led the Government to embark on further reforms to establish the Ghana Revenue Authority (GRA) as a modern and unified revenue authority and the Tax Policy Unit (TPU) at the Ministry of Finance and Economic Planning to provide research and analysis on tax legislation. GTZ and SECO have provided the technical assistance to tackle these challenges.

The support of GTZ and SECO is in its second phase. In the first phase the two development partners jointly supported the establishment of the Tax Policy Unit within the Ministry of Finance and Economic Planning.

The TPU was established to strengthen the capacity of the Ministry of Finance and Economic Planning to advice the Government to pursue accountable, transparent and sustainable tax policies which will contribute to improvements in fiscal performance. The first phase of the joint support helped the TPU to build capacity of staff and also provided office equipment and specialized software for tax analysis and forecasts.

This MoU marks the beginning of the second phase which has the objective to institutionalize the TPU within the Ministry of Finance and Economic Planning and support the integration of the Internal Revenue Service (IRS), Customs Excise and Preventive Service (CEPS) and the Value Added Tax (VAT) Service into a unified tax authority-Ghana Revenue Authority.

For more information contact:

Mr. David Nguyen-Thanh Mr. Martin Saladin

Programme Manager Head of Cooperation

Good Financial Governance Programme Embassy of Switzerland

GTZ

Tel: 0302 688 466 Tel:0302 225 008

David.Nguyen-Thanh@gtz.de martin.saladin@eda.admin.ch