By Enrico Nichelatti and Adnan Abdulaziz Shahir

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. The universal design yields slightly greater overall poverty reduction: the quasi-universal variant better protects large families. Although such revenues cover only a limited share of the poverty gap, redirecting them can expand social protection without raising distortionary taxes. The study links tax justice to social policy expansion and questions claims that universal benefits are unaffordable in low- and lower-middle-income countries. The study assesses only first-round effects and does not address political feasibility.