Pension Contributions Fall In 1st Quarter
A recent Bank of Ghana report on the real sector of the economy says employment conditions as measured by the total number of SSNIT pension contributors (both public and private sector) declined in the first quarter of this year, compared to a similar period in 2019.
It said the total number of contributors declined to 874,899 (down by 37.6% year-on-year) in March 2020 compared with 1,401,952 for a similar period in 2019.
Total private sector workers' contribution to the SSNIT Pension Scheme (Tier-1) went up by 9.8 per cent in year-on-year terms to GH¢180.73 million in March 2020 from GH¢164.60 million collected during the corresponding period in 2019.
In comparison with February 2020, it said private sector workers' contribution declined by 25.6 per cent. However, for the first quarter of 2020, the contribution grew by 24.8 per cent to GH¢610.81 million relative to GH¢489.43 million recorded in the same period in 2019.
The report continued that activities in the manufacturing subsector, measured by trends in the collection of direct taxes and private sector workers' contributions to the SSNIT Pension Scheme (Tier-1), recorded mixed performance during March 2020.
Total direct taxes collected decreased by 46.5 per cent (year-on-year) to GH¢1,087.24 million in March 2020, relative to GH¢2,031.79 million recorded in a similar period in 2019. Cumulatively, total direct taxes collected for the first quarter of 2020 declined by 4.9 per cent to GH¢4,113.91 million, from GH¢4,325.59 million for the same period in 2019. In terms of relative contributions of the various sub-tax categories, Income tax (P.A.Y.E and self-employed) accounted for 53.7 per cent, Corporate tax (40%) and “other tax sources” (6.3%).
It also stated that consumer spending, proxied by domestic VAT collections and retail sales, recorded mixed performance in March 2020, compared to the corresponding period in 2019, adding that domestic VAT collections declined by 19.7 per cent on a year-on-year basis to GH¢319.81 million from GH¢398.10 million.
“On a month-on-month basis, Domestic VAT dipped by 27.1 per cent in March 2020 from GH¢438.60 million in the preceding month. The observed decline in domestic VAT collections was partly due to decreased consumer demand during the review period.
“However, cumulatively, total domestic VAT for the first quarter of 2020 marginally went up by 4.5 per cent to GH¢1,182.25 million compared with GH¢1,131.40 million for the corresponding period of last year. Retail sales, on the other hand, increased by 53.7 per cent (year-on-year) to GH¢93.55 million in March 2020, up from the GH¢60.88 million recorded in the same period in 2019. Compared to February 2020, retail sales grew by 30.3 per cent. Cumulatively, for the first quarter of 2020, retail sales went up by 39.9 per cent to GH¢236.85 million from GH¢169.34 million for the same period in 2019,” it stated.
The report said the relative improvement in retail sales was largely due to the widespread panic buying just before implementation of the Covid-19 partial lockdown on March 30, 2020.