Africa: Urgent Tax Reform Needed – 3 Bold Steps

Analysis: Tax reform, property rates and the informal economy Africa's fiscal challenges are deepening as Ghana's top economist Professor Peter Quartey calls on the government to urgently tap property taxes and the informal sector, warning that revenue-to-GDP ratios trail West African peers. In this articleTax reform, property rates and the informal economyInformal Sector: Africa's Untapped Revenue EngineWhat Comes Next for Africa's Tax Landscape Prof. Quartey described property taxation as "low-hanging fruit" that remains woefully underutilized despite high-value assets nationwide.Ghana's massive informal sector sees millions in lucrative activity largely escaping the national tax net.First-quarter 2025 revenue shortfalls remain significant, though seasonal recovery is expected by mid-year.Tax reform, property rates and the informal economyGhana's struggle mirrors a broader pattern across Africa, where governments face mounting pressure to fund development without over-relying on foreign aid or debt. Professor Quartey, the former ISSER director, singled out property rates as an immediate fix — high-value buildings dot major cities yet generate negligible tax income."There are many beautiful, high-value properties across the country, but I am not sure we have mastered the process of taxing them," he told TV3 NewsCentral on July 23. The economist stressed that broadening the tax base, rather than squeezing already-compliant taxpayers, is the sustainable path forward.Informal Sector: Africa's Untapped Revenue EngineBeyond property, Quartey pointed to millions of informal workers whose economic activity dwarfs their tax contributions. Structural reform — not piecemeal enforcement — is required to bring this vast sector into compliance. He acknowledged government efforts but called the process a critical "work in progress."Ghana's revenue-to-GDP ratio lags behind several West African neighbors, a gap that undermines public investment in health, infrastructure, and education. According to the International Monetary Fund's Ghana page, the country's fiscal consolidation remains a central policy challenge through 2026.What Comes Next for Africa's Tax LandscapeThe economist concluded that closing the revenue gap with regional counterparts demands political will and administrative modernization. Digital property registries, simplified informal-sector levies, and stronger local government capacity are all on the table.Should African governments prioritize taxing property and the informal economy over introducing new levies on formal businesses? Share your thoughts below. #InternationalNews #GM247News 💡Historical ContextKey Topics: africa-tax-reform, property-taxation, informal-economyGhana's property tax struggles echo a pattern seen in Lagos, Nigeria, which in 2018 overhauled its land-use charge system and saw property-related revenue jump by over 60 percent within two years. That reform relied on digital property mapping and centralized billing — tools Ghana has yet to deploy at scale. Across sub-Saharan Africa, the IMF estimates that domestic revenue mobilization could unlock an additional 3-5 percent of GDP if property and informal-sector taxation were modernized. The political sensitivity of taxing informal traders, who often lack formal registration, has stalled similar reforms in Kenya, Senegal, and Tanzania over the past decade. Ghana's trajectory will likely serve as a test case for whether West African nations can close their revenue-to-GDP gaps without triggering public backlash. Related coverage: Focus on Property Tax and Informal Sector to Boost Revenue Prof. Quartey Urges Government. Prepared with AI assistance; Reviewed by the GM247 Editorial Desk.