Despite showing some positive results, the government’s efforts to boost domestic revenue mobilization in the country still needs to be enhanced as government was unable to meet its revenue targets for the first 3 months of the year.
According to data from the Bank of Ghana (BoG),government receipts, including grants, in the first quarter of 2021 was GH¢12,847.9 million (3.0% of GDP), lower than the target of GH¢15,831.9 million (3.7% of GDP). This means the government has missed its target by 18.8 percent in Q1 2021. However, the amount raised in the first three months of the year represents a year- on-year growth of 7.2 percent.
A breakdown of the total revenues raised in the first quarter of the year show that the country still obtains majority of its revenues through taxation. For the review period, the government raised GH¢10,410.2 million (81.0% of total revenue) from taxes. Non-tax Receipts amounted to GH¢2,158.1 million (16.6% of total revenue) whilst Grants raked in GH¢279.6 million (2.2% of total revenue).
Meanwhile, Non-Tax receipts for the period comprised Non-Tax revenue of GH¢1,624.8 million and other receipts of GH¢533.3 million. This was also lower than the target of GH¢2,438.3 million but was, however, higher than GH¢2,103.6 million recorded in Q1 2020.
Besides, grants disbursement of GH¢279.6 million fell below the programmed target of GH¢480.9 million by 41.9 percent and also recorded a year-on-year decline of 21.6 percent.
Income and Property Tax
Regarding taxes from income and property, government raised a total of GH¢5,168.6 million, missing the budgetary target of GH¢6,082.6 million by 15.0 percent. The amount mobilized in Q1 2021 is however, higher than that of the corresponding period of Q1 2020 by 8.1 percent.
Similarly, personal income taxes raked in GH¢1,913.5 million, which was below the programmed target by 9.8 percent. It however, recorded a year-on-year growth of 12.5 percent. Also, Company taxes totaled GH¢2,418.8 million, while other taxes, comprising royalties from oil and mineral summed up to GH¢399.6 million.
Moreover, inflows from National Fiscal Stabilization Levy (NFSL) for the period was GH¢59.8 million compared to GH40.8 million recorded in the similar period of 2020. Airport tax for the review period totaled GH¢28.2 million compared to GH117.13 million recorded in the similar period of 2020. This reflected a year-on-year decline of 76.0 percent.
Domestic Goods and Services
Furthermore, taxes on domestic goods and services amounted to GH¢4,325.9 million in Q1 2021, lower than the programmed target by 14.9 percent. This category of tax, according to BoG, comprise Excise Duty and Petroleum Tax of GH¢1,035.2 million, VAT collections of GH¢2,273.8 million, and National Health Insurance Levy of GH¢449.0 million. It also includes GET Fund Levy of GH¢449.0 million and GH¢118.5 million from Communication Service Tax.
According to the Bank of Ghana, all tax handles under domestic goods and services performed below their respective targets. They, however, recorded appreciable levels of year-on-year growth with the exception of excise duty, which recorded a year-on-year decline of 3.0 percent.
International Trade Taxes
International Trade Taxes amounted to GH¢1,472.7 million, lower than the budget target of GH¢1,618.2 million. In percentage terms, reflecting a negative deviation of 9.0 percent. It was, however, higher than the inflow of GH¢1,189.4 million recorded in the similar period of 2020. This indicated a year-on-year growth of 23.8 percent.
Non-Tax Revenue
Non-Tax receipts was made up of Non-Tax Revenue of GH¢1,624.8 million and other receipts of GH¢533.3 million. These were below their programmed targets by 30.5 percent and 34.4 percent, respectively. The BoG explained that Non-Tax Revenue comprised Retention of Internally Generated Funds (IGF) of GH¢1,106.2 million and Lodgements of GH¢518.6 million.
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