Leveraging AI to formalize the informal economy, enhance tax collection

By Christopher K. BEYEREH

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

Ghana possesses a rare convergence of digital infrastructure, institutional positioning, and international support to transform its tax administration through artificial intelligence.

The informal economy currently the source of most employment but minimal tax revenue represents both the greatest challenge and the largest opportunity

As African nations accelerate their digital transformation, tax administration stands at a pivotal crossroads. The continent’s growing economies and the public services they must fund depend on a modern, resilient, and inclusive tax system.

The Informal Sector Challenge:

Ghana’s informal sector accounts for 27-29% of GDP and employs roughly 80% of the workforce. However, only 68,600 self-employed individuals are formally registered with the Ghana Revenue Authority (GRA). While revenue from this sector has grown 292% from GH?365.7 million in 2018 to GH?1.43 billion in 2024, this represents a small fraction of its potential contribution.

As a result, Government through the GRA has started the implementation of what is known as the Modified Taxation System. A law to simplify things for the informal sector. Various strategies are currently being deployed to be able to capture majority of the informal operators.

It is my hope that practical and realistic efforts by all that matter will make this law a reality. Every body should get onboard; ubuntu! to wit; I am Because We are. All you just need is a Ghana Card and a mobile phone, and you are cool to go.

Ghana’s Existing Modernization Efforts:

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 including 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 currently hosts Google’s first African AI Research Center in Accra and is developing the $1 billion UAE-Ghana Tech Hub, poised to be Africa’s largest AI and Innovation Hub. In all these, what does it mean to Dr. Ato Forson; the Forcing Man, and the GRA?

The Reality:

True digital tax reform goes far 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 where taxpayers queue for hours, fill out paper forms, and risk losing receipts is fading, and in fact, has faded. In its place, a new vision is emerging: one where technology bridges the gap between government and citizen, formalizes the informal economy, and unlocks sustainable revenue growth. This is Ghana’s digital tax revolution and it’s already underway.

Ghana’s Tax Digitization Must Be User-centric, Accessible, Automated, and Transparent:

E-filing is only effective if it’s actually used. Too 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 & tax professionals.

Automated reminders, instant digital receipts, and real-time compliance dashboards can transform 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 also known in Ghana as -VAT is where digital receipts are automatically transmitted to GRA which has transformed value-added tax (VAT) collection.

The implementation of the E-VAT project by the GRA show 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. I think every company or business should be onboarded on the E-VAT platform.

Dear Hon. Minister I have a cutting-edge solution on Ghana’s E-VAT program that has the potential of Return on Investment of (ROI) of 900-2,400%. It has been tried and tested elsewhere, and this particular one is built for Ghana my motherland.

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 if 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.

References:

1. World Bank Document
2. Africa’s digital tax transformation: The latest on e-invoicing in 2025 | Innovate Tax
3. www.gra.gov.gh
4. Africa needs effective policies and infrastructure to prosper from artificial intelligence, experts say | United Nations Economic Commission for Africa
5. AU Commences Validation of Data Governance Frameworks to Accelerate Digital Single Market by 2030 | African Union
6. AI for Government | United Nations Development Programme
7. momo.mtn.com

The writer is the Founder for the African Society of Artificial Intelligence-ASAi & the African Centre for Tax Education &Policy-ACTEP. He holds a Postgraduate in AI & Data Analytics from the University of Texas, Certificate in Professional Course in Taxation (PCT), A Chartered Marketer and an MBA. [email protected] or [email protected]. Tell: 233246440723

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