Evaluating the Challenges in the Current Tax Systems in Ghana

Background: Taxation plays an indispensable role, serving as the lifeblood of public finance and a cornerstone of fiscal policy. Hence, the nature of the tax system is of critical importance towards the mobilization of domestic resources for sustainable and economic development. Nevertheless, the tax system in Ghana, like most developing nations, grapples with a myriad of challenges impeding its effectiveness. This study, therefore, sought to examine these challenges. Methodology: The study collected primary data from 120 respondents from the Headquarters of the Ghana Revenue Authority. Findings: Key findings reveal persistent issues such as tax evasion and a substantial informal economy, both of which hinder revenue collection efforts. Efforts to mobilize sufficient revenue to finance public services and development projects are often hampered by factors like tax exemptions and incentives that erode potential revenue sources, along with administrative inefficiencies that can impede the tax collection process. Conclusion: There are enduring challenges in Ghana's tax system, notably tax evasion and a substantial informal economy, impeding effective revenue collection. Mobilizing resources for public services and development is hampered by factors like tax exemptions and administrative inefficiencies that erode potential revenue. To address these issues, comprehensive reforms and policy adjustments are imperative. This is essential for realigning the tax system with Ghana's development objectives and ensuring fiscal sustainability.