The Executive Director of the Institute for Economic Research and Public Policy (IERPP), Professor Isaac Boadi, has stated that the government’s proposed 2025 tax reforms, aimed at alleviating financial pressures on households and businesses, could cost the country approximately GH¢7.1 billion.

He warned that failure to urgently implement compensatory fiscal strategies could destabilize public finances and undermine long-term economic resilience.

In a press release copied to GhanaWeb Business, the Dean of the Faculty of Accounting and Finance noted that while the proposed reforms may offer short-term relief, through reduced taxes on essentials and low-income earners, Ghana risks trading temporary comfort for prolonged fiscal instability.

To mitigate the potential impact, he recommended the introduction of a 5% luxury tax on high-end vehicles, electronics, and other luxury goods.

By targeting wealthier demographics without burdening low-income households, Prof. Boadi estimated that such a tax could generate up to GH¢800 million annually.

The IERPP Executive Director also called for stricter enforcement of property taxes, which he said could yield approximately GH¢1.2 billion and help address inefficiencies in local revenue collection.

Additionally, he emphasised the importance of export diversification by prioritizing processed cocoa and other value-added goods for African markets, leveraging opportunities under the African Continental Free Trade Area (AfCFTA).

On linking tax exemptions to small business formalization and digital payment adoption, Prof. Boadi noted that such initiatives would broaden the tax base, foster inclusive growth, and accelerate Ghana’s digital transition.

He reiterated that these measures, when effectively implemented, would strike a balance between fiscal stability and equitable, sustainable development.

SA/MA

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