Nearly a year after implementation, the Bank of Ghana has revealed that the government was able to mobilize a total of GHC 3.7bn from the Covid-19 levy, the Sanitation and Pollution levy as well as proceeds from Energy Sector Levy Act [ESLA] in 2021.
The amount according to the Bank of Ghana, indicated a 11.9 per cent decline from the targeted GHC 4.2bn.
The 1% Covid-19 recovery levy imposed on goods and services was to raise revenue to support government’s Covid-19 expenditure and its related matters amid the pandemic outbreak.
The GHC 3.7bn revenue mobilized from the Covid-19 levy, the Sanitation and Pollution levy and ESLA proceeds, added to the overall total revenue and grants of GH¢ 67.8bn (15.4% of GDP) for 2021.
Tax revenue which comprises of income & property, taxes on domestic goods and services, and international trade taxes, all summed up to GHC 55.1bn representing 12.6% GDP, which is lower than the projected GHC 55.8bn indicating a negative deviation of 1.2%.
International trade taxes also recorded some significant increase of GH¢ 6.7bn (1.5% of GDP) and exceeded the target of GH¢ 6.6bn (1.5% of GDP) by 2.1 percent, showing a year on year growth of 22.5%.
Taxes on Domestic Goods and Services, comprising of Domestic VAT, Excise Duty, GET Fund Levy, National Health Insurance Levy (NHIL) and Communication Service Tax (CST) for 2021, however experienced some decline of GH¢ 23.5bn (5.4% of GDP) and about 3.8 percent lower than the target, also representing a year-on-year growth of 32.5 percent.
Taxes on income and property was GH¢ 27.9bn (6.4% of GDP). This outturn was 6.6 percent below the target of GH¢ 29.9bn (6.8% of GDP), with most of the key tax components missing their respective targets. However, company taxes on oil and other direct taxes fell below their respective targets by 3.9 and 3.5 percent.
Non-Tax revenue for the period under review was GH¢ 7.3bn, representing 71.5 percent of the target. The outturn represented a year-on-year growth of 10.5 percent. The underperformance was largely due to lower than budgeted lodgments and retentions, resulting mainly from lower collection efforts by some MDAs. Lower dividend payments against budgeted targets also contributed to this development.
Total revenue & grants for 2021 also saw a decline of GH¢ 67.8bn (15.4% of GDP), lower than the target of GH¢ 72.4bn (16.5% of GDP). This outturn represented 93.7 percent of the 2021 target and recorded a year-on-year growth of 23.1 percent.
During the review period, domestic revenue totaled GH¢ 66.6bn (15.2% of GDP), below the target of GH¢ 71bn (16.2% of GDP). The revenue outcomes reflected mixed performances for both tax and non-tax proceeds.
Government received project grants to the sum of GH¢1.1bn, significantly lower than the envisaged target of GH¢1.4bn by 19.3 percent. This outturn was also lower than the GH¢1.2bn recorded in the corresponding period of 2020, thus reflecting a year-on-year decline of 3.8 percent.
Source: Norvanreports