Professionalization, Decentralization and a One-Stop Shop: Tax-Collection Reform in Ghana, 1986-2008

Between 1986 and 2008, direct tax revenue collected by Ghana’s Internal Revenue Service nearly doubled as a proportion of the country’s gross domestic product. This case study offers an account of organizational change within the IRS during that period. When the agency became autonomous from the rest of the Ghanaian civil service in 1986, its leaders recruited a large number of accountants and lawyers, raised salaries by 50%-100% and instituted a collective bonus system tied to annual revenue targets. In order to make taxes easier to pay, they delegated functions, people and equipment to local branch offices, monitoring those offices through monthly revenue reports and regular internal audits. Finally, the agency focused attention on customer service for the largest taxpayers by founding a Large Taxpayers Office. That office formed the basis for a cross-agency one-stop shop, the Large Taxpayers Unit, which allowed the 360 firms and individuals that accounted for 50%-60% of the country’s revenue to pay customs taxes, value-added taxes and income taxes in one place.
David Hausman wrote this case study on the basis of interviews conducted in Accra, Ghana, in January 2010.  Case published July 2011.
performance management
social pressure
revenue authority
tax collection
civil service
bureaucratic structure
institutional capacity
corruption & patronage
spoiler trap
economic services
Focus Area(s)
Civil Service
Critical Tasks
Civil service recruitment
One-stop shops
Performance management system
Core Challenge
Principal-agent problem (delegation)
Country of Reform
Case Studies
David Hausman