Using AI to formalize the informal economy and boost tax collection

Daftar Isi

A Love Letter to the Minister of Finance: Dr. Casiel Ato Forson

Ghana is uniquely positioned with a blend of digital infrastructure, institutional strength, and international support that can revolutionize its tax administration through artificial intelligence. The country’s informal economy, which provides the majority of employment but contributes minimally to tax revenue, presents both a significant challenge and a vast opportunity.

As African nations push forward with their digital transformation, tax administration finds itself at a crucial turning point. The continent's growing economies and the public services they must fund rely heavily on a modern, resilient, and inclusive tax system. Ghana, in particular, has a unique chance to lead this transformation.

The Informal Sector Challenge

The informal sector accounts for 27-29% of Ghana’s GDP and employs approximately 80% of the workforce. However, only around 68,600 self-employed individuals are officially registered with the Ghana Revenue Authority (GRA). Despite a 292% increase in revenue from this sector—from GH₵365.7 million in 2018 to GH₵1.43 billion in 2024—this still represents only a fraction of its potential contribution.

To address this, the government, through the GRA, has initiated the Modified Taxation System. This initiative aims to simplify tax processes for the informal sector. Various strategies are being implemented to capture the majority of informal operators. It is hoped that practical and realistic efforts by all stakeholders will make this law a reality. Embracing the spirit of ubuntu—“I am because we are”—every citizen needs just a Ghana Card and a mobile phone to participate fully.

Ghana’s Existing Modernization Efforts

The introduction of the Ghana Card PIN has replaced the GRA’s TIN, enabling biometric verification and seamless data cross-referencing across government databases. The GRA operates key infrastructure such as the Taxpayers’ Portal, the ICUMS customs system, and an expanding E-VAT electronic invoicing network.

Over 13 million customers use MTN Mobile Money alone, with combined platforms reaching 59.7% of adults and processing GH₵63 trillion in transactions in 2024. Ghana hosts Google’s first African AI Research Center in Accra and is developing the $1 billion UAE-Ghana Tech Hub, set to become Africa’s largest AI and innovation hub. These developments highlight the potential for Dr. Ato Forson, the "Forcing Man," and the GRA to drive meaningful change.

The Reality of Digital Tax Reform

True digital tax reform goes beyond launching e-filing portals. What Ghana needs is not just a website, but a comprehensive digital ecosystem that makes compliance seamless, transparent, and accessible to all. The old model of long queues, paper forms, and lost receipts is fading, making way for a new vision where technology bridges the gap between government and citizens, formalizes the informal economy, and unlocks sustainable revenue growth.

This is Ghana’s digital tax revolution, and it is already underway.

User-Centric Tax Digitization

E-filing is effective only if it is actually used. Many tax portals are desktop-only, complex, and disconnected from users' daily realities. The next generation of digital tax platforms must be mobile-first, intuitive, and designed for real people—not just accountants and tax professionals.

Automated reminders, instant digital receipts, and real-time compliance dashboards can transform the taxpayer experience. When the ordinary Ghanaian can file, pay, and track obligations in minutes, compliance becomes not just easier, but expected.

E-Invoicing and Digital VAT: Closing the Loopholes

Cash-based transactions and manual invoicing have long enabled underreporting and VAT leakages. Mandating e-invoicing, known as E-VAT in Ghana, ensures that digital receipts are automatically transmitted to the GRA, transforming value-added tax (VAT) collection.

The implementation of the E-VAT project by the GRA shows that real-time invoice reporting reduces fraud and increases revenue. For medium and large businesses, e-invoicing is not just a compliance tool—it’s a gateway to formalization, credit access, and regional trade. Every company or business should be onboarded onto the E-VAT platform.

Emerging Technologies: Blockchain and AI

Emerging technologies like blockchain and artificial intelligence (AI) offer powerful tools for integrity and efficiency. Blockchain can create tamper-proof ledgers for tax records, ensuring transparency and auditability. Meanwhile, AI-driven data analytics can detect anomalies, flag suspicious filings, and predict non-compliance patterns, shifting enforcement from reactive to proactive.

These tools aren’t about surveillance; they are about fairness. When evasion becomes harder and compliance easier, the burden shifts from honest taxpayers to those who previously slipped through the cracks.

Conclusion

Ghana’s digital tax revolution shouldn’t just be about technology—it’s about trust. It’s about building systems that reflect the realities of the Ghanaian economy, where informal work is the norm and mobile phones are lifelines. It’s about creating a tax culture rooted in fairness, inclusion, and accountability.

Governments that invest in integrated digital ecosystems will reap long-term benefits: broader tax bases, higher revenues, and stronger public confidence. The tools exist. The momentum is building. The question is no longer whether Ghana can modernize its tax systems, but how fast it can do so.

The future of taxation in Ghana is digital, inclusive, and interconnected. And it starts now. The moment to act is now. Ghana’s infrastructure, partnerships, and political will are aligning. The decisions made in the coming months will determine whether Ghana leads Africa’s tax technology revolution or follows it.