GRA hopeful of meeting target amid tax cuts
The Ghana Revenue Authority (GRA) has said although its revenue collection target for the 2017 fiscal year is challenging in view of the tax cuts, it is hopeful that with appropriate strategies, hard work and resilience of staff, it will be achieved.
Commissioner General of the GRA, Mr. Emmanuel Kofi Nti said: “In 2017, GRA has been given the task to mobilise over GH¢34billion into the national kitty. This calls for hard work on the part of all staff. The abolishment and reduction of a number of taxes announced by the government in the 2017 budget statement has thrown a big challenge to GRA to meet the gap that will be created.
We are hopeful that in 2017, though it is challenging, we have to make it. With the measures that we’ve taken, instead of frontloading the taxes we are rather back loading them and with all the incentives that we are giving the private sector, we should be able to up our revenue.”
The GRA has been tasked to collect GH¢34billion for the 2017 fiscal year. The Authority was tasked to mobilise GH¢29.59billion for 2016.
It exceeded its 2015 target of GH¢21.57 billion by GH¢620 million at GH¢22.17 billion, a 29.3 percent increase over that of 2014.
In an interaction with the media, Mr. Nti explained that a number of revenue enhancement measures will be undertaken principally to bring the untaxed segment of the population, especially operators in the informal secto,r into the tax net and thereby widen the scope of coverage.
These measures, he said, are also meant to ensure that those already in the net comply with the tax laws.
Other tax mobilisation measures, he explained, will include increasing the number of audits, regular external visits and inspection of taxpayers’ businesses to retrieve outstanding taxes, and monitoring by operational offices.
Last year, the GRA was unable to meet its GH¢29 billion target. Figures from the Revenue Authority reveal that it was able to collect about GH¢27 billion, representing a shortfall of about GH¢1.2 billion or negative 4.9 percent.
He attributed the shortfall to the challenges that crippled most of the sectors of the economy.
“The fact of the matter is that the weak performance of the economy in 2016 also reflected in the amount of taxes that were realised.”
In 2016, PAYE amounted to 12.5 percent compared to a target of 15 percent. Also, corporate taxes declined for the period under review.
The Finance Minister, Ken Ofori Atta, in presenting the 2017 budget, mentioned that eight taxes have been abolished.
They include the 1% Special Import Levy, Kayayei market tolls, 17.5% VAT/NHIL on financial services, 17.5% VAT/NHIL on selected imported medicines that are not produced locally, 17.5% VAT/NHIL on domestic airline tickets, Duty on imported spare parts, 5% VAT/NHIL on Real estate sales as well as Excise duty on petroleum.
The following reviews were equally announced: Corporate income tax to be progressively reduced from 25% to 20% in 2018, replacement of 17.5% of VAT/NHIL with 3% flat rate for traders, tax credits and other incentives for businesses that hire young graduates from tertiary institutions, Tax incentives for young entrepreneurs and reduction special petroleum tax rate from 17.5% to 15%.