Impact of import liberalization on aggregate imports and tariff revenue in Ghana: Impact of import liberalization on aggregate imports and tariff revenue in Ghana

In contributing to the ongoing debate on the impact of trade liberalization, this paper investigates the quantitative effect of import liberalization on imports and tariff revenue in Ghana. The Johansen cointegration and error correction technique was employed to determine the impact of import liberalization on aggregate imports, and inferred from the estimated results, how liberalization affects import tariff revenue. The findings of the study indicate that import liberalization has been in conflict with the revenue objective of economic reforms in Ghana. It has been suggested that public policy should focus on the identification of the major sources of duty revenue leakage and also focus on complementary measures such as tax replacement, for example substituting sales taxes for tariffs.