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23.06.2020 Business & Finance

Revenue & Grants Target Missed In 1st Quarter Of 2020

Ken Ofori-Atta, Finance Minister
LISTEN JUN 23, 2020
Ken Ofori-Atta, Finance Minister

Total Revenue and Grants for the first quarter of this year amounted to GH¢10,354.2 million (2.7% of GDP), substantially lower than the target of GH¢13,948.6 million (3.6% of GDP).

The outturn represented a 1.0 per cent year-on-year growth, compared with 9.5 per cent growth recorded in the same period of 2019.

Domestic revenue also amounted to GH¢10,033.6 million (2.6% of GDP), significantly below the target of GH¢13,541.6 million (3.5% of GDP).

According to the Bank of Ghana (BoG), which made this known, the revenue underperformance reflected shortfalls in tax revenues—driven by shortfalls in international trade taxes, taxes on goods and services, and taxes on income and property in response to unfavourable external and domestic conditions.

It added that non-tax revenue mobilization also declined sharply.

Throwing more light on the development, the BoG said of the total revenue and grants, tax revenue(comprising taxes on income & property, taxes on domestic goods and services and international trade taxes) amounted to GH¢8,421.3 million (2.2% of GDP), lower than the target of GH¢10,213.8 million (2.6% of GDP). This represented a year-on-year growth of 0.5 per cent, in sharp contrast to the 18.9 per cent growth recorded in the same period of 2019.

It also said taxes on income and property 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¢4,423.3 million, registering an annual growth of 21 per cent.

“This outturn was 11.4 per cent below target with airport taxes, company taxes, and self-employed taxes witnessing significant shortfalls as Covid-19 impacted tourism and business activities,” it said.

Again, it said taxes on domestic goods and servicesconsisting of Domestic VAT, Excise Duty, GETFund Levy, National Health Insurance Levy (NHIL) and Communication Service Tax (CST) for the first quarter of 2020 was GH¢3,624.9 million, and 18 per cent lower than the expected target.

“In year-on-year terms, the outturn represented a decline of almost 13 per cent with domestic VAT, NHIL and GETFund deteriorating sharply due to containment measures and protocols associated with Covid-19,” it mentioned.

The report said international trade taxesmainly import duty amounted to GH¢829.7 million and was over 34 per cent below the budget target. In year-on-year terms, the outturn declined by 42.5 per cent due to restrictions on both domestic and external movements in response to the Covid-19 pandemic.

SSNIT contribution to NHIL

It said thisamounted to GH¢45.7 million, lower than the expected target of GH¢125.2 million because of delays in payments of public servants' pension payments by government.

Non-Tax revenuedeclined to GH¢1,163.9 million in the first quarter of 2020 compared with GH¢1,362.5 in the corresponding quarter of 2019. This represented a shortfall of 53 per cent due to government's inability to realize the expected dividend, interest and profits from crude oil as international prices plummeted, while social distancing protocols affected fees and charges.

ESLA proceedsamounted to GH¢402.7 million and was over 44 per cent lower than the anticipated target. This outturn, which represented some five per cent year-on-year decline, was due to the plummeting crude oil prices on the international market, a reduction in the lifting of crude oil due to the pandemic and a decline in the demand for petroleum and petroleum products,” it stated.

Oil revenue (ABFA)

Thisrealized at the end of the first quarter amounted to GH¢331 million, strikingly lower than the expected amount of GH¢1,914.7 million, signifying substantial drop in crude oil prices.

“Government received project grantsin the sum of GH¢320.6 million, below the envisaged total grants of GH¢407 million. This outturn was, however, markedly higher than GH¢61.9 million received in the same quarter of 2019,” the report noted.

---Daily Guide

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