Policy analyst Sitsofe Mensah has attributed Ghana’s persistent fiscal challenges to the country’s long-standing tax exemption regime, which he says has been repeatedly flagged by the International Monetary Fund (IMF for more than a decade).
According to Mensah, successive IMF country reports have consistently identified tax exemptions as a major source of revenue leakage, cautioning that Ghana loses billions of cedis annually through waivers granted to companies that do not require financial incentives.
“For more than ten years, the IMF has made the same recommendation: stop granting exemptions to entities that do not need them,” Mensah stated. “For the same period, our leaders have responded with promises to review the system.”
He argued that these promised reforms have failed to materialise because the tax exemption framework serves political interests rather than sound economic policy.
“The exemption regime is not an accident,” Mensah said. “It is a deliberate feature of the system. It is how political favours are exchanged and how allies of the ruling class are rewarded.”
Mensah further described the practice as a form of state-sanctioned tax avoidance—legally approved but disconnected from meaningful public benefit.
“It amounts to legalised tax evasion for the well-connected,” he noted, “authorised by the very institutions tasked with safeguarding the public purse.”
He also questioned why successive IMF-supported programmes continue to emphasise austerity measures that burden ordinary citizens, while the structural drivers of revenue losses remain largely untouched.
“Government obligations do not vanish when exemptions are granted,” Mensah said. “Instead, the cost is transferred to those who are least able to bear it.”
Source: MyNewsGh.com
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