Business News of Saturday, 15 July 2017
Government ended the first four months of the year missing out on its revenue target, latest fiscal data covering government’s financial operations ending April 2017 has revealed.
According to the data, the state got GHC10 billion from domestic revenue as against the GHC12 billion target.
However, when grants are added to the total revenue, government also realised GHC11 billion which is still below what it has programmed for. This was still short of the GHC13.2 billion it was hoping to realise.
A careful look at the fiscal data showed that government missed out on meeting the target set for most of the various tax types. For instance, the state was hoping to get GHC10 billion in tax revenue but actually got GHC8.7 billion.
The Finance Ministry was projecting GHC1.7 billion from company taxes, but it was just able to gross GHC1.3 billion.
Mining royalties and airport tax were some of the few tax types that were able to gross more than what was programmed in the 2017 budget.
Reactions to revenue performance
An economist with the Institute of Fiscal Studies, Leslie Dwight-Mensah told JOYBUSINESS the challenge with the revenue numbers had nothing to do with recent tax cuts.
“This is because the necessary amendments to the tax cuts announced by Finance Minister were implemented from April and this data is from January to April this year,” he said.
He, however, maintained that the performance of the economy for last year is still impacting on the operations businesses in the country as well as over optimism on the part of government of revenue target.
Dwight-Mensah maintained that there might be the need to review some of the tax exemptions granted businesses to help make up for these shortfalls.
Government‘s expenditure for 4 months of 2017
On the brighter side, there was something to smile about, as government was keeping expenses under control. Although it planned to spend almost GHC17 billion, it actually spent GHC13.4 billion by the end of April.
This was due to savings made in controlling the wage bill; government programmed to spend some GHC5.2 billion as total compensation for public sector workers but actually spent just GHC5 billion.
Expenditure on goods and services reached GHC146 million instead as against a programmed target of GHC792 million.
Overall balance stood at the end of April stood GHC3 billion, compared to the GHC4.4 billion programmed. This was even below the budget deficit that was programmed by government for the first four months of this year.
Response from Government and Ghana Revenue Authority
According to persons close to government some measures being instituted would help improve the revenue from next month.
JOYBUSINESS understands revenue numbers for May and even June is still below target or what was programmed.
But officials at the Ghana Revenue Authority (GRA) have also told JOYBUSINESS that, the revenue is sometimes not good in first half of the year, but actually improve from the second half of the second.
Some of them have also maintained that a lot of businesses are yet to appreciate and connect with the new government in terms of policy and appreciate how they are planning to stabilise and manage the economy