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In Ghana we are working  with the Revenue Policy Division at the Ministry of Finance and Economic Planning (MoFEP) and the Ghana Revenue Authority (GRA). 

Our work is currently focused around the following priorities:

1. The construction of a micro-simulation model of Ghana’s tax and transfer system.

This model  facilitates the simulation of real and hypothetical changes to taxes and transfers on individual households. It allows for a wide range of policies to be examined, both as part of the policy formation process in advance of the annual budget, and potentially as part of more systematic reviews of the design of Ghana’s tax and transfer system.

The RPD and GRA teams have participated in a number of training sessions relating to the model, and once it is embedded in the policy-making process it   will enable them  to examine:

  • The distributional effects of the tax and benefit system – including on vulnerable and female-headed households
  • The revenue effects of reforms
  • The incentive effects (for example to work- or misreport income) 

2. Providing support to the tax policy costing process

The Government of Ghana sets annual budgets and regularly reviews  its existing tax laws, and the IFS team is supporting the RPD to develop structured responses to key tax policy questions drawing on available data and existing academic evidence. 

3. Collecting revenue data to support the analytical process

Vital to conducting high quality analysis is the availability of, and access to, administrative and survey data but is necessary to be realistic and cautious about the types of research and policy questions that it is feasible to answer given data limitations in low- and middle-income countries. Particular challenges have arisen with regards to accessing electronic data on small and medium taxpayers, linking taxpayers across tax bases, the reliability of both household and firm incomes and expenditures data, and the ability to track transactions along VAT chains. In order to overcome some of these challenges, we are working with the RPD and GRA to design and implement a data capture exercise. From 2018, newly digitised data will be available for analysis to allow researchers and civil servants to better understand the underlying characteristics of taxpayers and the heterogeneous impacts of tax policy reforms. 

IFS staff working in Ghana: