In recent years, Ghana has witnessed a troubling trend: a significant number of businesses shutting down due to the escalating tax burden.

This phenomenon has raised alarm among entrepreneurs, economists, and policymakers, prompting a critical examination of the factors at play and the implications for the country’s economic future.

Tax landscape in Ghana

Ghana’s tax system comprises various forms of taxation, including corporate income tax, value-added tax (VAT), excise duties, import duties, and social security contributions.

While taxation is essential for national development, providing funds for infrastructure, healthcare, education, and other public services, the structure and implementation of taxes in Ghana have become increasingly problematic for businesses.

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High tax rates

One of the primary concerns is the high tax rates imposed on businesses. Corporate income tax in Ghana stands at 25%, which is relatively high compared to neighbouring countries.

Additionally, the VAT rate of 15% adds a significant burden on both businesses and consumers.

High tax rates reduce profit margins, making it difficult for businesses to reinvest in their operations, innovate, and grow.

The heavy tax burden in Ghana has had a profound impact on businesses across various sectors.