The recent sharp appreciation of the cedi has dealt a significant blow to government revenues, the Commissioner-General of the Ghana Revenue Authority (GRA), Anthony Kwasi Sarpong, has revealed.
Speaking on Joy News’ PM Express Business Edition, Mr. Sarpong explained that the cedi’s rise from 15 to about 10.5 to the dollar over three months translated into a 30% drop in revenue, particularly at the ports, where duties are denominated in foreign currency.
“If you look at the duties at the port, they are denominated in foreign currency, mostly in USD. Once the exchange rate dropped from 15 to about 10.5, that’s a 30% sharp drop in cedi terms,” he said.
Despite the short-term impact, Mr. Sarpong remains optimistic that lower rates will stimulate imports and restore revenue. “We are confident that because the rates have come down, importers can import more, and the amount of cedis needed for duties is lower. Over time, we believe revenues will rebound,” he added.
He noted that the extractive industry and upstream petroleum sectors have also been affected, but emphasized that structural reforms will ultimately drive growth.
“One of the fundamental measures is the introduction of modified taxation to expand the tax base, especially for Micro, Small and Medium Enterprises. For example, businesses with a turnover of GH¢200,000 a year will pay just 3%—roughly GH¢5,000 annually. With over two million potential SMEs, this could generate about GH¢10 billion, or GH¢1 billion a year initially,” he explained.
Mr. Sarpong also highlighted the importance of public awareness and technology in enhancing tax compliance. Nationwide tax education will be launched next month, and a new digital system will capture online transactions, allowing taxes to be deducted at the point of payment.
“This is going to be a game-changer for both local and foreign institutions trading in Ghana. Despite the temporary hit from the cedi’s rebound, the combination of reforms, tax education, and digital enforcement will restore revenues and keep government finances on track,” he said.
Source: Abubakar Ibrahim
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