Total Revenue and Grants performed significantly well in the fiscal year 2020 despite the challenges inflicted on the economy by the COVID-19. Recent data from the Finance Ministry show that Total Revenue and Grants amounted to GH¢55,132 million. This is a 2.7 percentage point higher than the revenue target of GH¢53,667 million for the fiscal year 2020.
Expressed as a percentage of the country’s Gross Domestic Product (GDP), total revenues and grants accounted for 14.4 percent. This is against a target of 13.9 percent of GDP in 2020.
Meanwhile, the data also shows that revenue and grants performed much better in 2020 compared to 2019. The 2020 outturn exceeded the 2019 performance by 3.3 percent. In the 2019 fiscal year, total revenues and grants amounted to GH¢53,380 million as compared to a target of GH¢67,071 million. The amount realized in 2019 accounted for 15.3 percent of GDP as compared to a target of 16.9 percent.
Non-Oil Tax Revenue
Similarly, Non-oil tax revenue exceeded the revised Budget target by 4.5 percent. Non-oil tax revenue amounted to GH¢42,568 million, 11.1 percent of GDP, in 2020. This source of revenue comprises taxes on non-oil Income and Property, Domestic Goods and Services, and International Trade.
However, the revised Budget target was GH¢40,717 million, accounting for 10.6 percent of GDP. The Ministry of Finance credited taxes on International Trade for the strong non-oil tax revenue outturn. International trade taxes exceeded the budget target by 72.1 percent and were also 50.0 percent higher than recorded in 2019.
This outstanding performance registered from International Trade Taxes follows from the implementation of the Integrated Customs Management System (ICUMS). The Ministry of Finance noted that ICUMS has ensured more efficient management and collection of revenues at our ports.
Domestic Tax Division
However, the Domestic Tax Division recorded a mixed performance during the review period. Taxes on Petroleum products and non-oil Income and Property Taxes fell below their respective targets. Nonetheless, other tax handles such as Mineral Royalties, Corporate Income Taxes, Excise Duty, VAT, NHIL, GETFund, Self-Employed, and Communication Services Tax all out-performed their respective targets.
Meanwhile, the Ministry of Finance cited several factors that anchored these positive performances. This includes improved compliance activities of GRA; and a favorable increase in gold prices from an average of US$1,560.67 ounce in January 2020 to US$1,856.66 in December 2020. Another factor cited was the higher sales figures reported by some taxpayers in some months.
Furthermore, increased use of services of Telcos due to restrictions in movement following the outbreak of the COVID-19 pandemic also led to an increase in revenues.
Taxes on Income and Property
Taxes on Income and Property, however, recorded a negative deviation. The government attributed the underperformance to tax exemption granted to frontline health workers and non-collection of Personal Income Tax from some companies. Some of them are schools and hotels which were closed for about nine months.
Oil and Gas Receipt
Also, revenue from upstream Oil and Gas activities amounted to GH¢3,587 million, 6.3 percent lower than the program target of GH¢3,827 million. The global decline in crude oil prices due to the impact of COVID-19 was largely responsible for the low performance.
Moreover, disbursements of grants by Development Partners for the period amounted to GH¢1,229 million. This was slightly above the revised target of GH¢1,223 million by 0.5 percent.
Revenue target for 2021
Meanwhile, Total Revenue and Grants for 2021 is projected to rise to GH¢72,452 million, 16.7 percent of GDP. This, according to the Finance Ministry, is up from an amount of GH¢55,132 million, 14.4 percent of GDP for 2020.
Domestic Revenue is estimated at GH¢70,987 million and represents an annual growth of 32.2 percent over the outturn of GH¢54,922 million for 2020. Of the total Domestic Revenue, Non-oil Tax Revenue constitutes 75.6 percent and amounts to GH¢53,632 million, 12.4 percent of GDP.
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