The Ghana Revenue Authority (GRA) has projected total non-oil tax revenue (gross) for 2021 at GH¢57 billion, a report of 2021 budget estimate for the Authority by the Finance Committee of Parliament has stated.
The figure is about GH¢12 billion from last year’s outturn of GH¢45 billion. The target, the report noted, is on the back of some critical interventions and activities that GRA intends to adopt to increase revenue and to achieve the 17.5 percent tax to GDP ratio.
The interventions include the implementation of end-to-end ITA system for both direct and indirect tax, including VAT, phase II deployment of the Integrated Customs Management System (ICUMS), the installation of a rationalised ad consolidated data center, and the implementation of a data warehouse solutions to provide a 360 view of taxpayer liability.
Interventions will also include the migration to cashless GRA offices and a connectivity project to connect all GRA offices, the rollout of taxpayer campaigns to enhance experience and demystify taxes, as well as build capacities and skills of staff, among others.
The Authority through these activities and interventions, seeks to ensure optimal revenue collection that will encourage maximum voluntary tax compliance.
Thus, the Authority seeks to institute a fair and transparent tax environment to establish a strong, professional and credible organisation that will ensure compliance with statutory tax revenue obligations,” the report said.
In 2020, the Authority exceeded it revenue target by GH¢2.6 billion, representing a 6.2 percent increase. The Authority in 2020 collected a total revenue amounting to GH¢45.4 billion as against a target of GH¢42.7 billion.
As regards expenditure, the report noted that the Authority spent an amount of GH¢1.37 billion as against the revised budget amount of GH₵1.36 billion for the same period.
Meanwhile, for the 2021 financial year, Parliament has approved an amount of GH¢1.4 billion for the Authority.
Out of this amount, GH¢1.1 billion representing 76 percent is allocated for compensation of employees, with GH¢243 million representing 16 percent allocated for goods and services, and GH¢114 million being8 percent allocated for non-current assets.
The 2021 expenditure budget of the Ghana Revenue Authority will be funded from the statutory revenue retention to be derived from a projected revenue target of billion. At an expenditure budget of GH¢1.47 billion, the retention level granted for the year 2021 comes to approximately 2.5 percent to tax revenue,” the report added.
Meanwhile, government in the 2021 Budget statement declared that it is hoping to raise some GH¢72.4billion in revenue for this year after achieving the revised target for last year despite reduced economic activity stemming from impacts of the coronavirus pandemic on the economy.
Out of the 2021 target amount, about GH¢70.9billion is expected to be raised from domestic sources. Of this, non-oil tax revenue will constitute about 74 percent – which will amount to GH¢53.6billion, equivalent to 12.4 percent of GDP.
This essentially means government aims to heavily rely on taxes as the main revenue generation strategy to address persistent shortfalls it has faced over the last four years. Hence, the budget statement has introduced new taxes and made an upward revision for some existing ones.
Among the taxes government has introduced to achieve this target is a new tax dubbed ‘COVID-19 Health Levy’, which will see a one percentage point increase in the National Health Insurance Levy and a one percentage point increase in the VAT Flat Rate to support expenditures related to COVID-19.
In addition to this, government is proposing a Sanitation and Pollution Levy (SPL) of 10 pesewas on the price per litre of petrol/diesel under the Energy Sector Levies Act (ESLA); and a further Energy Sector Recovery Levy of 20 pesewas per litre on petrol/diesel under the ESLA as a means of finding additional resources to cover the excess capacity charges which have resulted from the Power Purchase Agreements (PPAs).