The Finance Minister, Ken Ofori-Atta has disclosed that government missed its revenue target by 1.4 billion cedis for the first five months in the year 2018.
Presenting the Mid-Year Budget Review to Parliament on Thursday July 19, the Minister said the situation has prompted for a revision to the fiscal framework and outlook to achieve the government’s fiscal objectives and targets.
The government had planned to raise 18.8 billion cedis, however 17. 3 billion cedis translating into a revenue shortfall of 1.4 billion cedis was raked in by the government, according to the finance minister.
“As already mentioned, the January to May 2018 fiscal performance shows that the total revenue and grants fell short of target by 1.428 billion; 0.6% of GDP whilst total expenditures were below target by 796.5 million cedis, 0.3% of GDP. Resulting in a cash fiscal deficit of 6.3 billion, 2.6% of GDP against a target of 5.7 billion, 2.4% of GDP,” he explained.
The Finance Minister also revealed that the total expenditure of 23.7 billion cedis fell below its target of 24.5 billion cedis, resulting to a deficit of 796.5 million cedis.
“Provisional data for the period indicates that total revenue and grants amounted to 17.4 billion, 7.2 percent of GDP against the program target of 18. 8 billion, 7.8 percent of GDP. Despite observed averages in some expenditure total expenditure also fell below and amounted to 23.8 billion, 9.8 percent of GDP, against a target of 24.6 billion, 10. 2 percent of GDP. This resulted in a fiscal deficit of cash basis of 6.4 billion cedis, 2.6 percent of GDP against a target of 5.7 billion, and 2.7 percent of GDP”.
Meanwhile total expenditures for the rest of the year has been reviewed downwards from 62 billion to 61.7 billion while revenue has also been revised downwards from 51 to 50.86 billion cedis.
This notwithstanding, Ken Ofori Atta believes these new tax measures should position the economy on stable grounds.
“Therefore to ensure that the achievements of the 2018 fiscal objectives and targets are not derailed, this midyear review affords us the opportunity to propose sustainable revenue expenditure measures for the consideration and approval of the house. These measures mainly include new tax measures which are estimated to yield 1.345 million. This includes an enhancement to tax compliance of about 500 million cedis.