- GH¢2.4bn shortfall recorded
TOTAL revenue and grants in 2018 amounted to GH¢47.6billion, about 15.9 percent of GDP, according to the Bank of Ghana’s latest Monetary Policy Report.
This is against a target of GH¢49 billion (16.4 percent of GDP), indicating aa shortfall of GH¢2.4bn, representing 2.9 percent shortfall in revenue mobilization last year.
The revenue underperformance was largely attributed to lower import VAT, increase in re-export of warehoused products, lower VAT/NHIL receipts from Telcos, admittance of large volumes of imports into exempt or low-tariff categories, lower than anticipated petroleum receipts as well as ESLA receipts, due to lower petroleum volumes, lower-than-expected dividend payments, and delays in the sale of the electromagnetic spectrum, the report emphasized.
Domestic revenue summed up to GH¢46.5 billion (15.6 percent of GDP) in 2018 compared with GH¢39.9 billion (15.6 percent of GDP) recorded in 2017, representing a year-on-year growth of 16.4 percent although the outturn was below the program target by 3.7 percent.
On the other hand, tax revenue amounted to GH¢37.7 billion (12.6 percent of GDP) in 2018, compared with GH¢32.2 billion (12.6 percent of GDP) over the comparative period. The performance represented a year-on-year growth of 17.2 percent and constituted 97.9 percent of the projected target.
For the breakdown, Income and Property taxes comprising personal income tax (PAYE), self-employed taxes, company taxes (including taxes on oil), royalties from oil and minerals, national stabilization levy and airport taxes amounted to GH¢18.7 billion (6.3 percent of GDP).
This registered an annual growth of 40.1 percent and was 13.0 percent above the target for the year 2018.
Taxes on Domestic Goods and Services made up of VAT, Excise duty, National Health Insurance Levy (NHIL), GETFund Levy and Communication Service tax amounted to GH¢15.0 billion (5.0 percent of GDP), below the budget target of GH¢16.9 billion (5.7 percent of GDP), but recorded an annual growth of 12.6 percent.
Taxes on International trade (mainly import duties) realized during the period under review was GH¢6.1 billio(2.0 percent of GDP), which was lower than the expected target of GH¢6.6 billion (2.2 percent of GDP). This represented a year-on-year growth of 11.3 percent.
Social Contributions (SSNIT Contribution to NHIL) amounted to GH¢377.3 million (0.13 percent of GDP) and was 23.6 percent below the projected target of GH¢494.0 million (0.17 percent of GDP).
The report also noted that non-tax revenue amounted to GH¢6.5 billion, representing 2.2 percent of GDP as against the projected target of GH¢7.4 billion (2.5 percent of GDP). This represented a shortfall of 12.4 percent.
Donor support, in terms of grants, for the year 2018 was GH¢1.1 billion (0.4 percent of GDP), exceeding the envisaged target of GH¢761.1 million (0.3 percent of GDP). This was made up of project grants of GH¢1.1 billion and programme grants of GH¢13.5 million. Comparatively, donor support was GH¢1.5 billion (0.6 percent of GDP) for the same period in 2017.
Domestic growth to be buoyant
The report also said domestic growth prospects remain positive and are expected to be supported by further increases in crude oil production and continued improvement in the macro environment.
“With the recently ended recapitalization, banks are also better-positioned to support economic activity”, the report emphasized.
credit: The Finder