Sunday, 17 November 2019

GHC36bn revenue mobilized as at end of third quarter of 2019


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Adnan Adams Mohammed 

Finance Minister, Ken Ofori-Atta has explained that total revenue and grants for the period (January to September 2019), amounted to GH¢36.3 billion (10.5% of GDP). 

The outturn represents a per annum growth of 9.2 percent despite a 13.6 percent shortfall relative to the target of GH¢42.0 billion (12.1percent of GDP) as captured in the 2020 budget statement presented to parliament, last week. 

The budget statement also indicated that, out of the Total Revenue and Grants, Non-oil Tax Revenue, which comprises taxes on Income and Property, Goods and Services and International Trade constituted about 75 percent of the entire revenue portfolio and amounted to GH¢27.2 billion. The outturn represents a per annum growth of 12.1 percent, slightly less robust when compared to the 15.9 percent per annum growth recorded during the same period in 2018.

 “A few factors contributed to the general the underperformance of non-oil Tax Revenue”, Mr OforiAtta has noted during the budget presentation.    “Firstly, taxes on International Trade, which consists of Import Duty and Levies, External VAT, and Customs National Health and GETFund levies continued to be negatively impacted by lower import volumes, high admittance of imported goods into the zero-rated and/or tax-exempt import brackets and the lower tariff bands, up to the 10 percent tariff levels.

“As a result of these dynamics, the anticipated increase in revenue yield from import volumes following the reduction in the benchmark values of import duties has not materialised. The reduction in the benchmark values of import duties is part of ongoing reforms at the ports which is expected to make Ghana’s port an attractive destination for international trade over the medium-term.

The finance minister also told parliament that, shortfalls emanating from taxes on Income and Property constituted about 49 percent of the total shortfall in non-oil Tax Revenue. “This was mainly on the back of a rather weak performance from Corporate Income Tax collections in the third quarter due to the non-revision of assessment by most-large taxpayers as anticipated, as well as the non-realisation of expected growth in personal emoluments from the private sector. 

“Taxes on Goods and Services were impacted mainly by shortfalls in Excise Duty and to lesser extents, Domestic VAT and Communications Service Tax (CST).”

This is in spite of recording a 0.8 percent deviation from target, Domestic VAT recorded a remarkable 29 percent per annum growth, following the introduction of the VAT withholding policy which requires selected VAT traders to deduct and pay to the Ghana Revenue Authority (GRA), a percentage of VAT payable to suppliers.

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