GHANA Country Profile

Tax Administration

Individual Corruption

According to Transparency International Global Corruption Barometer 2009, one-third of Ghanaians surveyed reported having had contact with tax revenue officials in 2008 and of which 14% reported having paid a bribe. This is in keeping with earlier surveys by Afrobarometer 2005 and Transparency International Global Corruption Barometer 2007 which revealed that a significant number of household respondents perceived tax officials to be involved in corruption.

Business Corruption

According to Transparency International Global Corruption Report 2009, most Ghanaians are not familiar with tax laws, a fact that has often led taxpayers in the private sector to complain about corruption and extortion by tax officials. According to the World Bank & IFC Enterprise Surveys 2007, companies in Ghana report that they expect to make unofficial payments when meeting with tax officials. However, companies are also known to engage in corruption in order to avoid paying taxes and many companies under-report their sales for tax purposes. According to Global Integrity 2009, tax laws are generally administered without discrimination, but complaints of corruption and harassment in relation to taxation are reportedly common.

Political Corruption

The Ghanaian tax system suffers from a range of problems, including corruption and abuse of office, misapplication of exemption laws, political interference by the executive office and low levels of capacity among tax collection agencies, such as the Internal Revenue Service (IRS). According to the 2005 Auditor General's report, an IRS official was found to have embezzled GHC 4.3 billion, and Transparency International Global Corruption Report 2009 reports on high ranking IRS officials covering up tax evasions and conducting secret dealings.

Frequency

The World Bank & IFC: Doing Business 2010:
- A medium-sized company operating in Ghana must on average make 33 payments to the tax authorities every year and spend 224 hours preparing, filing, and paying taxes at a total tax rate of 32.7% of profits.

Transparency International: Global Corruption Barometer 2009:
- 14% of households who had contact with tax revenue services throughout 2008 report to have paid a bribe.

Transparency International: Bribe Payers Index 2008:
- The business executives interviewed assigned the tax revenue authorities a score of 3.7 on a 5-point scale (1 being 'not at all corrupt' and 5 'extremely corrupt').

Afrobarometer: Summary of Results Ghana 2008:
- 79% of Ghanaian households surveyed perceive tax officials to be involved in corruption.

The World Bank & IFC: Enterprise Surveys 2007:
- 18% of companies expect to give gifts in meetings with tax officials.

- The average annual number of required meeting or visits for companies with tax officials was 4.

- 14% of companies identify tax administration as a major constraint to doing business.

- 59% of companies report that a typical company reports less than 100% of its sales for tax purposes.