2014 revenue targets breached -- Terkper

Finance Minister Seth Terkper says the country was unable to meet its key revenue targets as development partners held back on grants and domestic revenue mobilisation efforts were derailed by weak tax collection.

Total revenue and grants for the period was GH¢ 19,471.6 million, equivalent to 20.8 percent of GDP, against a target of GH¢ 22,533.4 million, equivalent to 25.4 per cent of GDP.

He said the outturn was 13.6 per cent lower than the budget target and 16.8 per cent higher than the outturn for the same period in 2012. Domestic revenue, made up of tax and non-tax revenue, amounted to GH¢ 18,732.1 million, against the budget target of GH¢ 21,275.0 million.

“The shortfall in domestic revenue was due to weak tax revenue performance in all tax types, except corporate income tax from the oil companies and communication service tax. The outturn was 12.0 per cent lower than the budget target and 20.8 per cent higher than the outturn for the same period in 2012, “he added.

Mr. Terkper said this in when he presented to Parliament the mid-year review of the National Budget Statement and the Economic Policy and Supplementary Budget Estimates of the government for 2014.

Mr Terkper said non-oil tax revenue, excluding exemptions for the period, amounted to GH¢ 12,708.3 million (13.6 per cent of GDP), 18.7 per cent lower than the budget target of GH¢ 15,634.5 million (17.6 per cent of GDP).

He said including oil and exemptions, tax revenue amounted to GH¢ 14,307.7 million, equivalent to 15.3 percent of GDP. This was 16.3 percent lower than the target of GH¢ 17,090.8 million (19.3 per cent of GDP).
In nominal terms, he said, tax revenue was 14.3 percent higher than the outturn recorded in 2012.

“In total, these revenue measures yielded revenue of about GH¢ 168 million or 0.2 per cent of GDP in 2013. The full effect of these measures are expected to strongly impact on revenue performance in 2014 and contribute to the continuing fiscal consolidation, in line with the multi-year adjustment effort,” he said.

“On the other hand, grant disbursement from our development partners was 41.2 percent lower than the budget target of GH¢1,258.5 million and 36.3 per cent lower than the outturn recorded during the same period in 2012.

“The lower than expected outturn of grants was mainly due to the non-disbursement of budget support from some of our Multi-Donor Budget Support (MDBS) partners as well as the slow disbursement of project grants, he said.

“As a result of the shortfall in revenue and grants, government reduced spending on goods and services as well as other expenditure items. This led to total expenditures being lower than budgeted.