Former Finance Minister Dr Amin Adam has called for intensive efforts to plug all loopholes that facilitate capital outflows out of Ghana, draining the country of necessary revenue for development.

Dr Adam stressed the urgent need for reforms, stating that the country’s current legal framework is insufficient to address the complex financial web, which leads to revenue losses.

Speaking at a forum held at the University of Professional Studies, Accra (UPSA), under the theme “Tackling Tax Revenue Leakages in Ghana”, Mr Adams said, "National legislation is inadequate to address this canker. Aside from strengthening legislation, we must critically examine issues such as debt loading, cost inflation, and cost recovery techniques, which are used to understate tax revenues."

He further pointed out that some of these problematic practices have already been identified in a recent audit conducted on upstream petroleum taxes by the Ghana Revenue Authority (GRA).

He explained, "Some of these practices have already emerged in a recent audit on upstream petroleum taxes by the GRA, which have become the subject of international arbitration."

His comments underscore the ongoing challenges Ghana faces in addressing tax evasion and financial mismanagement.

The country will continue to face difficulties in maximising its revenue potential unless these issues are tackled head-on.

Ghana loses an estimated $1.4 billion annually due to illicit financial flows, which include issues like corruption, tax evasion, and illegal trade practices.

Illicit financial flows reduce the amount of revenue available to the government, making it harder to fund essential services and development projects.

This loss of revenue can exacerbate the country's debt and budget deficits, further straining the economy.
Illicit financial flows can discourage both domestic and foreign investment, hindering economic growth.

The practice could further destabilise the financial system and undermine the government's efforts to promote financial inclusion.