Strengthening Ghana’s Tax Policy: A $2.2 Million Grant from KOICA

Strengthening Ghana’s Tax Policy: A $2.2 Million Grant from KOICA

The Korea International Corporation Agency (KOICA) has signed a Memorandum of Understanding (MoU) with the government of Ghana. This agreement pledges a grant of $2.2 million to enhance the country’s tax policy. The grant aims to bolster the tax administration in Ghana, with KOICA set to collaborate with leading tax experts from Korea to formulate a master plan tailored to the Ghanaian context. The MoU was officially signed in Accra by the Deputy Minister of Finance, Dr John Ampontuah Kumah, and the Country Director of KOICA, Mr Dong Hyun Lee.

Increasing National Revenue through Tax System Expansion

Dr Kumah underscored the importance of the grant agreement, stating that it will play a pivotal role in expanding Ghana’s tax system, thereby increasing the nation’s revenue. To address the loopholes in the tax collection process, the government plans to leverage Information Communication and Technology (ICT) tools. Dr Kumah also expressed the Ministry of Finance’s determination to mitigate the budget deficit and manage the national debt effectively.

Mr Dong Hyun Lee elaborated on KOICA’s commitment to catalyze a significant transformation in Ghana’s tax administration by sharing Korea’s experience and vision. Korea’s economic growth, he said, is not solely a product of business development. Instead, it is also due to the government’s dedicated efforts, which involved extensive learning through various master plan initiatives. He further underscored the significance of tax revenue to socio-economics, asserting that tax is a crucial resource for development, akin to energy, land, and human empowerment.

A Master Plan for Modern Tax Administration: An Ambitious Path Forward

The project aims to increase domestic revenue collection in Ghana by streamlining various tax systems and incorporating them into digital structures. Thus, the collaboration with top Korean tax experts will focus on tailoring a master plan to restructure the country’s tax administration. The plan will include initiatives to widen the Value Added Tax and income tax bases using digital transaction databases and promoting electronic invoicing to enhance the transparency and reliability of cross-border commercial transactions. Additionally, the project will involve linking tax systems, including import VAT related Customs Systems, establishing an electronic mobile cash receipt system, and an integrated tax portal for citizens to effortlessly pay their taxes.

This agreement marks a significant milestone in Ghana-Korea relations. The successful implementation of this project is expected to have a long-term positive impact on the livelihoods of Ghanaians. It represents the tangible efforts and collaboration between two nations to improve the lives of citizens and contribute to sustainable development. By leveraging the expertise of Korean tax experts and the implementation of innovative tax administration strategies, it is hoped that this project will contribute to a more modernized, resilient tax administration system in Ghana, leading to a positive long-term transformation.