The Ghana Revenue Authority (GRA) is confident of meeting its ambitious revenue target of 34 billion cedis by the end of this year.
This comes despite the one billion cedis value of all the tax cuts announced in the 2017 budget.
“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 backloading them and with all the incentives that we are giving the private sector, we should be able to up our revenue,” Commissioner General of the GRA, Emmanuel Kofi Nti told Citi Business News.
Last year, the GRA was unable to meet its 29 billion cedis target.
Figures by the Revenue Authority revealed that it was able to collect about 27 billion cedis.
This represented a shortfall of about 1.2 billion cedis or negative 4.9 percent.
The GRA Boss also 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 realized.”
In 2016, PAYE amounted to 12.5 percent compared to a target of 15 percent.
Also corporate taxes declined for the period under review.
Tax cuts
The Finance Minister, Ken Ofori Atta in presenting the 2017 budget mentioned that eight taxes have been abolished under the NPP administration.
They included 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, replace 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 reduce special petroleum tax rate from 17.5% to 15%.
Policy initiatives
Meanwhile the GRA has outlined key interventions aimed at strengthening the tax collection.
Among them is the strengthening of the performance audit of companies; checking the possible abuse of transfer pricing and illicit flows as well as strengthening capacity within the revenue authority.
According to Mr. Kofi Nti, the GRA intends to, “Curtail the exemptions regime to generate revenue.”
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By: Pius Amihere Eduku/citibusinessnews.com/Ghana
