The Potential of Digital ID Systems for Tax Administration: the Case of Ghana

Growing interest in building digital public infrastructure stems from the belief that robust digital identification systems (DIS) can drive significant development gains. Foundational DIS provide unique identifiers to manage identity data across public and private transactions (World Bank 2024). They enable governments to integrate data, facilitating improvements in taxation, public financial management, and social protection. In low-income countries (LICs) DIS can enhance taxpayer registration by linking individuals to verified IDs, reducing errors and reliance on self-reporting (Santoro, Prichard and Mascagni 2024). This is particularly relevant in Africa, where curbing informality and achieving ambitious registration targets is a priority. DIS can identify informal operators, streamline registration, and improve taxpayer experience by reducing compliance costs and increasing transparency. Better data quality from DIS also helps monitoring and enforcement, ensuring compliance and enabling data-driven governance. As this study shows, while ID data can help tax administration to register taxpayers and raise more revenue, to fully unlock the potential from ID systems more effort is needed to target enforcement, improve services, and integrate systems.

Summary of ICTD African Tax Administration Paper 39.