Tax Mobilization Among MSMEs in Ghana
As companies work to reduce barriers to access and participation, as well as remove systems of exclusions from their operational practices, they should look at how educational and formalization training solutions, for local businesses, can be a part of their comprehensive growth, impact and ESG strategy. She Grows It (SGI) has explored how Ghanaian owned businesses specifically can be a significant component to increasing tax revenue and growing Ghana beyond aid.
Here is a summary of the opportunities and challenges to consider:
POLITICAL, ECONOMIC, AND TECHNOLOGICAL EDUCATION PROVIDE A SIGNIFICANT PATH TO ADDRESSING DEMOGRAPHIC AND CULTURAL BARRIERS THAT PREVENT TAX COMPLIANCE
In the Ghanaian business ecosystem roughly nine out ten businesses are MSMEs, which presents 60% of the labor force, and contributes 22% to the Gross Domestic Product (GDP). However employment in Ghana is predominantly informal where more than 80 percent of the employed are working in the informal sector. Over half of the employed (55.9 %) are own-account workers (self-employed); 20.4 percent are employed in family enterprises and 17.6 percent are wage employees. Yet, studies from The Nature Conservancy show MSMEs could provide more revenue through formalized business practices.
increase formalization in heavily informal industries and sectors.
Improve management of existing businesses