An Economist with the Institute of Fiscal Studies is imploring government to address the issues that militate against effective revenue mobilisation in the country.
Leslie Dwight Mensah said the failure of the President Nana Addo Dankwa Akufo-Addo government to meet its revenue target captured in its mid-year 2017 budget review, points to a major issue with revenue generation.
He told Evans Mensah on Joy FM’s Newsnite Monday, this is not the first time a government has been unable to meet its revenue target, despite promises to the contrary.
“This is the fifth year [a] government is struggling to attain revenue target,” the Economist said.
Finance Minister, Ken Ofori Atta presented government’s mid-year 2017 budget review to Parliament.
Despite inheriting a “weak economy” characterised by high fiscal deficit and high debt-to-GDP ratio from the past government, he said the economy is being stabilised.
Mr Ofori Atta said the total domestic revenue mobilised by government in both tax and non-tax revenues, amounted to GH¢16.9 billion within the last seven months.
Of this amount, the Finance Minister said the total tax revenue (including upstream petroleum receipts) was GH¢13.7 billion as against a target of GH¢15.7 billion.
Also, “The provisional outturn was 13.1 percent lower than the target of GH¢15.7 billion. Upstream petroleum receipts amounted to GH¢342.9 million, against a target of GH¢319.3 million; of which, GH¢115.65 million was from Corporate Income Taxes.”
To reflect the challenges in revenue mobilisation, Mr Ken Ofori-Atta announced a downward revision of the total revenue and grants by 0.9 percent of the Gross Domestic Product (GDP) from GH¢44.5 billion to GH¢43.1 billion.
The downward review represents a revenue target cut by GH¢1.4 billion, a development the Minority in Parliament said was expected.
The opposition lawmakers said government’s failure to meet its revenue means it will be unable to meet other targets set out in the 2017 budget.
Minority Spokesperson on Finance, Casiel Ato Forson told Parliament the figures put out by the Minister were cosmetic and not the reflection of the general condition of the economy.
“What you heard today [Monday] will not translate into good news,” the former deputy Finance Minister delivered his verdict, adding government’s dishonesty is to blame for its failure to meet its revenue target.
But the economist said the past National Democratic Congress (NDC) government was also not able to meet its revenue target at a point in time.
Leslie Dwight Mensah said the challenges with the revenue collection is the reason government has put some restraints on spending, which he said is “understandable and welcome.”
The Finance Minister also announced a downwards revision of the total expenditure by 1.1 percent of GDP from GH¢58.1 billion to GH¢55.9 billion, but the economist has warned of some consequences.
He said the implication of the reduced expenditure projection is that some of government’s “ambitious projects” such as the free senior high school (SHS), one district, one factory and one village, one dam among others may suffer.
Mr Mensah said the planned spending on these programmes is not likely to be fully met because of the expenditure cut.