dimensions of taxation in Ghana
Ernest Aryeetey, Isaac Osei-Akoto, Abena D. Oduro and Robert Darko Osei
Recent discussions on mobilizing domestic resources as part of the financing for development agenda have highlighted the fact that relatively little attention is paid to gender biases in taxation and the way in which reducing gender disparities in tax liability can help reduce household poverty in developing countries.
This chapter seeks to fill this gap by addressing three questions: (1) do the personal income tax laws in Ghana ensure formal and substantive equality for women and men? (2) who bears the burden of indirect taxes in Ghana? and (3) what can be learnt about the gender dimensions of tax burden in Ghana? More specifically, following a brief summary of the structure of the labour force, it analyses how tax policies and tax reforms are impacting differentially on women and men, and in particular on poor women. In so doing, it goes beyond the traditional approach to understanding gender, which is typically to group households by headship status. Rather, the approach is to group households not only by headship but by other characteristics such as employment and demographic structure, and to use a richer typology for tax incidence. The chapter then considers the impact of different policy scenarios in Ghana for different household types and proposes recommendations for change.
Agriculture has traditionally played an important role in Ghana's economy. In 2006, the sector accounted for approximately 36 per cent of the gross domestic product (GDP). Next in importance is the services sector, which accounted for 30 per cent of GDP. The share of manufacturing is low and is estimated at 8.8 per cent of GDP. Industry has been the fastest-growing sector at 7.3 per cent per annum followed by the services sector at 6.5 per cent and agriculture at 5.7 per cent.
In 2005–06, it was estimated that about 67 per cent of women and 71 per cent of men aged 15 years and older were in the labour force. About 50 per cent of employed women and 55 per cent of employed men aged 15 years and above were working in agriculture, which is the single largest sector of the labour force.
About 27 per cent of men and fewer than 10 per cent of women are employed in regular paid work – that is, receiving a salary or wages from an employer. The