The Institute for Fiscal Studies (IFS) is calling on the government to review tax incentives offered to businesses in different sectors. It warns that too many exemptions are undermining Ghana’s efforts to raise revenue at home.
IFS Acting Executive Director Dr. Said Boakye says the government should rethink its use of tax breaks to attract local and foreign investment, especially when the benefits are not worth the revenue lost.
Speaking at a pre-budget press conference about Ghana’s challenges in raising domestic revenue, Dr. Boakye said widespread tax exemptions are a major obstacle to stronger revenue performance.
He referred to the Ghana Investment Promotion Centre’s Incentives Inventory, which lists 31 income tax, customs, and financial incentive packages for businesses in various industries.
Dr. Boakye said the number and size of these concessions raise questions about whether Ghana receives enough economic benefit in return for the revenue it gives up.
He highlighted incentives under the Free Zones Act and the Ghana Automotive Development Policy, and called for a fresh review of the country’s approach to investment incentives.
He said the government should rely less on tax exemptions to attract foreign investment.
“Generally, the government should refrain from over-relying on tax exemptions/incentives to attract foreign investment,” he stated.
He also warned that foreign-owned companies’ contribution to economic output should not automatically be used to defend generous tax breaks.
“Mere contributions to GDP by foreign-owned firms should not serve as a justification for continuous loss of government revenue through exemptions,” he said.
The IFS is calling for a full review of current incentive packages, including corporate income tax exemptions in different sectors, to find and remove those that fail to provide enough economic value.
Dr. Boakye says the government should compare the revenue it gives up with clear benefits, such as job creation and foreign exchange earnings.
The institute also says that strengthening Ghana’s economic and political environment would attract investment more sustainably than continuing to depend on tax breaks.
The proposal comes as concerns grow about Ghana’s weaker revenue performance compared with other countries in Sub-Saharan Africa.
IFS figures show that Ghana’s total revenue and grants were 15.7% of GDP in 2025, below the regional average of 20.1%.
The institute says reviewing tax exemptions, fighting corruption, and closing revenue gaps will be key to raising more domestic revenue and reducing the country’s dependence on borrowing.