After weathering the storm to put up an impressive performance last year, the government has decided to increase the domestic revenue target for the Ghana Revenue Authority (GRA) in the 2022 fiscal year.
The ministry of Finance has tasked the national revenue collection institution to mobilize GH₵80.30 billion as domestic revenues this year. This year’s target for the Authority is GH₵23.24 billion higher than last year’s target. The recent target represents an increment of 40.73 percent over the target of GH₵57.055 billion in 2021.
The Ministry of Finance disclosed this at the International Customs Day (ICD) Celebration which is marked on January 26 each year to acknowledge and appreciate the role that customs officials and agencies play in ensuring the smooth flow of goods across the world’s borders.
Last year, the GRA exceeded its revenue target by 0.5 percent despite the challenges that businesses faced in Ghana and across the world. A speech read on behalf of the Minister of Finance at the event, commended the management of GRA for exceeding the 2021 revenue targets.
Government hopeful GRA will exceed new target
Mr George Swanzy Winful, a representative of the Minister of Finance at the event, underscored that the performance of the Authority in 2021 has reposed the government’s confidence in the GRA to exceed the new target.
The ministry of Finance highlighted that the digitalization programme had seen the introduction of several systems, including the implementation of the Integrated Customs Management Systems (ICUMS) and the Ghana.gov platform. This, according to the Ministry, has enhanced custom’s processes and also reduced revenue leakages at the ports.
The Ministry of Finance underscored that the role of technology is very crucial in revenue mobilization and expressed hope that the GRA and for that matter, the Customs Division, would pay particular attention to adopting the data culture and innovative technologies to help move GRA’s revenue mobilization to another level.
“l am confident that there is more GRA, and the Customs Division can do to further enhance its level of efficiency. The Ministry of Finance will continue to support the various initiatives of GRA on the digitalization drive to ensure that the needed revenue is effectively and efficiently mobilized”.
Ken Ofori-Atta, Finance Minister
Last year’s performance of the GRA
Last year GRA’s revenue collection came to GH₵57.32 billion which the Authority said exceeded its 2021 target by GH₵265.39 million. Last year’s performance, saw a marked improvement in most of the revenue indicators including the tax buoyancy.
The performance in 2021, the GRA said, represented a growth rate of 26.3% over the 2020 revenue and is the highest annual growth in the last ten (10) years. The country’s tax to GDP ratio in 2021 was 13.4 percent, the highest recorded in the last five years, according to the revenue collection Authority.
The Domestic Tax Revenue Division collected GH₵41.23 billion in 2021, an improvement of 25.6% over the 2020 revenue performance. Similarly, the Customs Division collected an amount of GH₵16.08 billion, representing 26.8% over the 2020 performance.
In a recent sensitization campaign on the proposed E-levy, Hon. Ken Ofori-Atta said: “our comprehensive agenda to increase revenue mobilization while reducing fiscal slippages/leaks is on course through RACE”.
Meanwhile, in 2022, government expects to raise a total of GH¢100,517 million as total revenues including grants. This amount will account for 20.0 percent of the country’s Gross Domestic Product (GDP) this year, up from a projected outturn of GH¢70,347 million (16.0 percent of GDP) for 2021.
Of the projected revenues including grants for 2022, domestic Revenue is estimated at GH¢99,547 million and represents an annual growth of 44.0 percent over the estimated outturn for 2021. This means the GRA is expected to raise 80.66 percent of the projected domestic revenues this year.
To achieve this revenue targets, the government is counting on its proposed levy on electronic transactions because “the E- Levy is a necessary tool to increase our Tax to GDP from circa 13% to 16% and above, guarantee that we all pay”. The levy however, is expected to raise only GH¢6,963 million this year, about 7 percent of projected domestic revenues for 2022.
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