Efforts to broaden Ghana’s tax base are being hindered by longstanding challenges within the informal economy, according to a new report titled “Ghana’s Untapped Economy: Analysis of Tax Compliance Behaviour of Informal Sector Workers in the Greater Accra Region”, by BudgIT Ghana, in collaboration with the Society for Women in Taxation Ghana and the International Budget Partnership (IBP).
The study reveals that while many informal sector workers are willing to comply with tax obligations, systemic obstacles continue to block voluntary compliance and limit revenue mobilisation.
A major underlying issue is the widespread distrust in government institutions. Many informal workers believe tax revenues are either mismanaged or lost to corruption. This perception has eroded confidence in the tax system and weakened the motivation to contribute. The lack of visible benefits—such as improved infrastructure or essential services—only deepens public scepticism.
Beyond issues of governance, the report also identifies structural and economic factors impeding compliance. Income instability across the sector makes it difficult for many to make regular tax payments. The tax system itself is often seen as complex and opaque, with bureaucratic registration processes that are difficult to navigate, particularly for those with limited formal education.
Women in the informal sector face additional challenges. The report finds that female entrepreneurs—who make up a significant portion of the workforce—are disproportionately burdened by indirect taxes and more frequent enforcement. Many report experiences of harassment, limited financial flexibility, and the pressure of balancing business operations with caregiving duties.
Despite these challenges, the study notes a strong willingness among informal workers to pay taxes if the system becomes more transparent, equitable, and attuned to their everyday realities.
To address these issues, BudgIT Ghana and its partners recommend targeted reforms, including simplified tax registration and payment processes through mobile and decentralised platforms. The report also calls for the expansion of mobile money and USSD-based payment options to make tax compliance more accessible. Additionally, it advocates for gender-sensitive tax policies, such as flexible payment arrangements and anti-harassment enforcement protocols.