Informal Sector Now Worth Gh¢81bn but Tax Payments by Operators Remain Low
The country’s informal sector, according to data from the Ghana Statistical Services (GSS), is now worth more than a quarter of the economy’s total value – re-igniting the longstanding debate over finding innovative means to rope the sector into the tax net to shore up domestic revenue.
The 2018 annual Gross Domestic Product (GDP) figures from the GSS show that out of the country’s total GDP of GH¢300.5billion, the informal economy is worth some GH¢81.2billion and is growing at 2.6 per cent per annum.
The figure, which translates into 27 per cent of GDP, means that more than a quarter of economic activities in the country falls outside the tax net.
The situation has negatively impacted the government’s domestic revenue mobilisation, thereby resurrecting calls for the Ghana Revenue Authority to devise innovative measures to rope the informal sector into the tax net.
Commenting on this, a professor of economics at the University of Ghana, Prof. Peter Quartey, said even though the informal sector’s activity is smaller compared to the formal sector, leaving it outside the taxpaying population still has an effect on the economy; hence, all efforts must be made to rope them in.