The Ministry of Finance has revealed a significant decline in the contribution of import duties to Ghana's total tax revenue over the past two decades.

According to the newly published Survey of the Ghanaian Tax System, the share of import duties in total tax revenue has decreased from 18% in 2000 to 13% in 2022. This 5% drop highlights a broader trend in the country's tax landscape, raising concerns among policymakers and stakeholders about the sustainability of revenue generation from international trade.

The Survey, produced jointly with researchers from the Institute for Fiscal Studies (UK), provides comprehensive insights into Ghana’s tax system as of January 2024. It serves as a critical repository of information for researchers, policymakers, and the public. The report highlights several key trends in policy, administration, and revenue collection since the previous edition published in 2021.

Ghana's tax-to-GDP ratio stood at 13.8% in 2022, falling short of the government’s target of 18-20% by 2027. Although this figure represents a nearly 6 percentage point increase since 2000, it has seen minimal gains since 2017 and remains volatile.

The growth in tax revenues since 2000 has primarily been driven by increases in corporate and personal income tax, as well as VAT. However, revenue growth from Personal Income Tax (PIT) and VAT-type taxes has stagnated in recent years. Notably, these three tax types accounted for nearly 70% of total collections in 2022, a significant rise from 57% in 2000.

The importance of tax collections from international trade has diminished. In 2022, taxes collected on imported goods made up only 33% of overall tax revenues, a substantial decrease from 54% in 2000.

As of June 2023, government revenue from import taxes amounted to around 1.14 billion Ghanaian cedis (GHS), corresponding to approximately 94.97 million U.S. dollars. The decline signals a need for a reassessment of the country’s tax policy, particularly regarding international trade.

Ghana's 2002 tariff structure for imports establishes various duty rates and exemptions for different goods. The zero rate duty applies to agricultural and industrial machinery, solar generating sets, certain motor vehicles (ambulances), and educational materials. Imported mosquito nets are also exempt from duties.

The five percent rate covers interchangeable tools and motor vehicles with a cylinder capacity of up to 1900cc. New duties apply to imported fish and commercial vehicles. Specific raw materials for manufacturing are included under this rate, while fish caught by Ghanaian vessels and from ECOWAS waters remain duty-free.

A ten percent rate applies to raw materials and includes a concessionary duty for hotels and restaurants on certain items like refrigerators and air conditioners. The standard duty rate for most imports is set at twenty percent.

Exemptions are provided for charitable gifts for health and education by NGOs, which are exempt from duties. However, other imports may incur duties unless specifically exempted by Parliament.

A one percent processing fee applies to exempt goods and unaccompanied personal effects, while an examination fee of one percent is imposed on imported used vehicles, with some exemptions applicable.

Additional levies include a 0.5 percent ECOWAS Levy on goods from non-ECOWAS countries and a 0.5 percent EDIF Levy on non-petroleum products. The import VAT rate is set at 12.5 percent for all finished pharmaceutical products.

The import excise rate varies for commodities such as tobacco (140 percent) and beer (50 percent). Goods without a Tax Clearance Certificate incur a one percent charge. A ten percent concessionary duty rate is available for hotels and restaurants, but prior approval is required. This tariff structure aims to balance trade facilitation, revenue generation, and support for key sectors.