- February 20, 2022
- Posted by: Charles Yeboah Nixon
- Category: Economics
The Bank of Ghana has described the pace of revenue mobilisation in 2021 as below target.
This reflected in both tax and non-tax revenues.
However, the Central Bank, said government expenditure and arrears clearance was broadly within the target.
In its January 2022 Monetary Policy Report, it said total Revenue and Grants for 2021 was GH¢67.878 billion, about 15.4% of Gross Domestic Product.
This was lower than the target of GH¢72.477 billion, approximately 16.5% of GDP.
This outturn, the Bank of Ghana, said represented 93.7% of the 2021 target and recorded a year-on-year growth of 23.1%.
During the review period, domestic revenue totalled GH¢66.696 billion, approximately 15.2% of GDP.
This was below the target of GH¢71.012 billion (16.2% of GDP).
Furthermore, the report pointed out that the revenue outcomes reflected mixed performances for both tax and non-tax proceeds.
Tax revenue, comprising taxes on income and property, taxes on domestic goods and services, and international trade taxes, all summed up to GH¢55.172 billion (12.6% of GDP).
This was lower than the target of GH¢55.834 billion (12.7% of GDP), representing a negative deviation of 1.2%.
Taxes on income and property was however GH¢27.969 billion, about 6.4% of GDP.
This outturn was 6.6% below the target of GH¢29.932 billion (6.8% of GDP), with most of the key tax components missing their respective targets.
However, company taxes on oil and other direct taxes fell below their respective targets by 3.9% and 3.5%.
For Domestic Goods and Services, the taxes consisting of Domestic Value Added Tax (VAT), Excise Duty, GET Fund Levy, National Health Insurance Levy (NHIL) and Communication Service Tax (CST), for 2021 totalled GH¢23.567 billion.
This was about 5.4% of GDP, and about 3.8% lower than the target.
On year-on-year terms, the collection represented a growth of 32.5%.
International trade taxes, comprising mainly import duties, was GH¢6.752 billion (1.5% of GDP) and exceeded the target of GH¢6.613 billion (1.5% of GDP) by 2.1%.
This tax type, the report said, also recorded a year-on-year growth of 22.5%.
Tax refunds of GH¢3.116 billion was lower than the target of GH¢3.423 billion for 2021, but recorded a year-on-year growth of 20.5%.
Non-Tax revenue for the period under review was GH¢7.369 billion, representing 71.5% of the target. The outturn represented a year-on-year growth of 10.5%.
The report said the underperformance was largely due to lower than budgeted lodgements and retentions, resulting mainly from lower collection efforts by some Ministries, Departments and Agencies.
Lower dividend payments against budgeted targets also contributed to this development.
Other revenue measures made up of ESLA proceeds, COVID-19 Levy, as well as Sanitation and Pollution Levy raked in a total of GH¢3.706 billion. This however fell short of the target of GH¢4.205 billion by 11.9%
For grants, government received project grants to the sum of GH¢1.182 billion, significantly lower than the envisaged target of GH¢1.465 billion by 19.3%.
This outturn was also lower than the GH¢1.228 billion recorded in the corresponding period of 2020, thus reflecting a year-on-year decline of 3.8%.