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How could taxing illicit financial flows contribute to financing a universal child benefit in Ghana?

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  • Enrico Nichelatti
  • Adnan Abdulaziz Shahir

Abstract

Trade mis-invoicing represents a significant economic challenge in Ghana, with losses estimated at 3.03 per cent of gross domestic product in 2018. We examine the potential of a universal child benefit in Ghana through a counterfactual taxation of illicit financial flows. Using microsimulation, we model two budget-neutral designs: a flat per-child transfer and a quasi-universal schedule with higher amounts for larger households. Both options lower poverty and inequality, with stronger effects in rural areas and among larger households.

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  • Enrico Nichelatti & Adnan Abdulaziz Shahir, 2025. "How could taxing illicit financial flows contribute to financing a universal child benefit in Ghana?," WIDER Working Paper Series wp-2025-56, World Institute for Development Economic Research (UNU-WIDER).
    • Handle: RePEc:unu:wpaper:wp-2025-56
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    References listed on IDEAS

    as
    1. Rema Hanna & Benjamin A. Olken, 2018. "Universal Basic Incomes versus Targeted Transfers: Anti-Poverty Programs in Developing Countries," Journal of Economic Perspectives, American Economic Association, vol. 32(4), pages 201-226, Fall.
    2. Ortiz, Isabel, & Behrendt, Christina. & Acuña-Ulate, Andrés. & Nguyen, Quynh Anh., 2018. "Universal basic income proposals in light of ILO standards key issues and global costing," ILO Working Papers 995008692502676, International Labour Organization.
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