Tax revenue target missed
Taxes collected by Customs Excise and Preventive Service underperformed in the first half of this year, totaling GH¢1,018 million, which was 85 % of the target. Even though other taxes such as those on income and property, collected by the IRS, and domestic VAT, by the VAT Service, met their targets and in some cases exceeded it, the pace of growth of tax collection slowed, in year-on-year terms, to 25 % from 30 % for the corresponding period in 2009.
However, total revenue collected by CEPS, comprising import duties, import VAT and petroleum taxes, for the first half of the year increased 12 % over last year’s total revenue of GH¢907 million.
Total domestic revenue for the period also increased 25 % to GH¢2.9 billion. Total expenditure for the period amounted to GH¢3.8 billion (14.7 % of GDP) compared with GH¢3 billion (14 % of GDP) spent in the corresponding period last year. The amount was 1.7 % more than the half year target and represented a year-on-year increase of 25.2 %, compared with an annual growth of 12.2 % recorded for the same period in 2009.
The increase in government spending, according to official sources, was mainly fueled by discretionary spending.
It is expected that with the inauguration of the new Ghana Revenue Authority, tax collection efforts will improve.
The authority, according to its mandate, would put in place measures to overcome challenges including unprofessional conduct and compromise of integrity which gives rise to collusion with taxpayers to evade tax.