The recent surge in the local currency, hailed by many as a positive sign towards economic recovery, has instead become a bane on government revenue, particularly at the ports.

The Ghana Revenue Authority (GRA) has reported a significant decline in government revenue due to the recent appreciation of the cedi.

According to the Commissioner-General of the GRA, Anthony Kwasi Sarpong, the cedi's rise from 15 to 10.5 to the dollar over the past three months has resulted in a 30% drop in revenue, particularly affecting port duties denominated in foreign currency.

Speaking on Joy News' PM Express Business Edition, Commissioner-General Sarpong explained that the exchange rate fluctuation has had a substantial impact on revenue collection.

"If you look at the duties at the port, they are denominated in foreign currency, mostly in USD. Once the exchange rate dropped from 15 to about 10.5, that's a 30% sharp drop in cedi terms," he stated.

How the cedi's strength cost the GRA nearly a third of its revenue

He expressed confidence that, despite the short-term impact of the situation, the lower exchange rates will stimulate imports and ultimately restore revenue.

He explained, "We are confident that because the rates have come down, importers can import more, and the amount of cedis needed for duties is lower. Over time, we believe revenues will rebound."

The GRA boss emphasised that structural reforms will drive growth, particularly in the extractive industry and upstream petroleum sectors.

According to him, "One of the fundamental measures is the introduction of modified taxation to expand the tax base, especially for Micro, Small and Medium Enterprises."

He continued that "For example, businesses with a turnover of GH¢200,000 a year will pay just 3%, roughly GH¢5,000 annually. With over two million potential SMEs, this could generate about GH¢10 billion, or GH¢1 billion a year initially,"

Tax analyst speaks on GRA's foreign income enforcement drive

Sarpong, who also underscored the importance of public awareness and technology in enhancing tax compliance, disclosed that a nationwide tax education will be launched next month.

He added that this will be done alongside a new digital system that will capture online transactions and allow taxes to be deducted at the point of payment.

"This is going to be a game-changer for both local and foreign institutions trading in Ghana. Despite the temporary hit from the cedi's rebound, the combination of reforms, tax education, and digital enforcement will restore revenues and keep government finances on track," he emphasised.

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