Working Paper 45

While debates about taxation and social protection in relation to the informal economy are widespread, there is little empirical evidence to support them. Using new and representative data on informal workers in Accra, Ghana, this paper contributes novel evidence on the extent to which informal workers in Accra have access to social protection and benefitted from COVID-19 relief programmes.

The paper explores the tax burdens of informal workers in Accra, as well the degree to which they might be able to make additional contributions through taxes or contributions to social protection schemes. It investigates the equity, redistributive, and gendered impacts of informal workers’ fiscal burdens and access to social protection and COVID-19 relief programmes.

Three key findings emerge. First, most informal sector operators in Accra are not covered by social protection, with the exception of the National Health Insurance Scheme (NHIS). Second, in contrast to a number of claims, the paper finds that informal sector operators in Accra do pay a range of taxes, permits, levies and fees. Especially for informal sector operators at the lower end of the income spectrum, the ratio of taxes to earnings is substantially higher than for formal workers. Third, informal sector tax burdens are highly regressive, with a disproportionate burden falling on the lowest earning segments of the informal sector. The evidence therefore suggests that for substantial proportions of the informal sector there is little room for further taxation or contributions.


Nana Akua Anyidoho

Nana is an Associate Professor at the Institute of Statistical, Social and Economic Research (ISSER) and the Director of the Centre for Social Policy Studies (CSPS), both at the University of Ghana. Her research areas focus on social policy and social development.

Max Gallien

Max Gallien is a Research Fellow at the ICTD. His research specialises in the politics of informal and illegal economies, the political economy of the Middle East and North Africa and development politics. He completed his PhD at the London School of Economics. Max co-leads the informality and taxation programme with Vanessa, as well as the ICTD’s capacity building programme.

Ghida Ismail

Ghida Ismail is a technical and data consultant in WIEGO’s Urban Policies Programme and a Research and Statistics Fellow in the United Nations Development Programme’s Human Development Report Office. She can be contacted at: [email protected].

Florian Juergens-Grant

Florian Juergens-Grant is a social protection specialist and project manager in the Social Protection Programme of WIEGO (Women in Informal Employment: Globalizing and Organizing). He can be contacted at: [email protected].

Mike Rogan

Michael Rogan is an Associate Professor in the Department of Economics and Economic History and the Neil Aggett Labour Studies Unit (NALSU) at Rhodes University. Since 2011 he has been a research associate in the global research and advocacy network, Women in Informal Employment: Globalizing and Organizing (WIEGO). He holds a PhD and a Master’s degree in Development Studies and a Bachelor of Arts in International Studies from the University of Washington in Seattle. His research interests include: gender, informal employment, health, poverty and inequality, and education and skills development.

Vanessa van den Boogaard

Vanessa van den Boogaard is a Research Fellow at the ICTD and a Senior Research Associate at the Munk School of Global Affairs and Public Policy at the University of Toronto. She completed her PhD thesis on informal revenue generation and statebuilding in Sierra Leone, and has ongoing research on the topic in the Democratic Republic of the Congo and Somalia. Vanessa leads the ICTD’s new programme on civil society engagement in tax reform and co-leads the research programme on informal taxation.