Taxes generated from international trade recorded GHC829.7 million, lower than the budget target of GHC1.2billion, and still lower than GHC1.4billion recorded in the same period of 2019, the Bank of Ghana (BoG) has said in its first-quarter bulletin report.
Total import duty realised was 34% below target, and recorded a year-on-year decline in growth of 42.5%.
At the beginning of the year, when the coronavirus took centre-stage, starting from China, countries began implementing lockdown measures and restrictions on the movement of people which essentially closed down factories. As China is Ghana’s biggest international trading partner, most importers could not receive their consignments as planned in the first quarter.
Then in mid-March, when Ghana recorded its first case of the disease, the government imposed restrictions on travel outside the country’s borders – a ban that remains in force – making it impossible for traders in the import business also to travel and bring in goods.
This has had a knock-on effect on the state coffers through the revenue normally generated from taxes on international trade.
It is however expected that with the prospective opening of borders in September 2020, as announced by President Akufo-Addo, will significantly improve the revenue situation in the third quarter.
Tax take
Besides the loss of revenue to the country, businesses have seen an astronomic jump in the cost of raw materials as high demand for the few supplies available on the market has led to a hike in prices of finished goods.
Taxes from international trade are not the only revenue generation sector affected negatively by the pandemic. According to the report, the domestic goods and services tax also recorded a negative deviation of 18.2%, against its programmed target of GHC3.6billion.
This category of tax comprises excise duty and petroleum tax of over GHC1 billion, VAT collections of GHC1.8 billion, National Health Insurance Levy of GHC342.1 million, a GETFund Levy of GHC344.6 million and GHC102.6 million from Communication Services Tax.
Taxes from income and property of GHC4.4 billion collected during the first quarter missed the budgeted target by 11.4%, but recorded year-on-year growth of 21.1%.
Income taxes improve
Personal income taxes raked in GHC2 billion, which exceeded the programmed target by 36.6%. Company taxes totalled GHC1.6 billion, while other taxes comprising royalties from oil and minerals amounted to GHC487.2 million.
Overall, government receipts in the first quarter (including grants) totalled GHC10.3 billion, or 2.7% of GDP. This was lower by 25.8% than the target of GHC13.9 billion and recorded year-on-year growth of 3.2%.
Total revenue was made up of tax revenues of GHC8.4 billion (81.3% of total revenue), social security contributions to the National Health Insurance Levy of GHC45.7 million, non-tax revenue of GHC1.1 billion (which represents 11.2% of total revenue) and GHC320.6 million from grants.
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