The Institute of Fiscal Studies (IFS) says the government’s revised total revenue and grants target of GH¢229.95 billion by the end of the year is likely not to be achieved.
The think tant said revising the target upward from GH¢227.08 billion to GH¢229.95 billion, an equivalent to 16.4 per cent of Gross Domestic Product (GDP), was untenable due to the challenges that constrained Ghana’s revenue mobilisation efforts in the first half of the year.
Speaking at a press briefing on the assessment of the government’s mid-year fiscal policy review, Mr Leslie Dwight Mensah, a research fellow at IFS, explained that inspite of economic performance showing improved signs of recovery and stabilisation, total revenue and grants underperformed in the first half of the year by GH¢3.24 billion.
Despite the underperformance, he noted that government had not revised downwards its revenue projections, neither had it introduced rigorous policies to shore up revenue except for the anticipated GH¢2.87 billion to be realised from the introduction of the GH¢1 petroleum levy.
“To achieve the revised revenue target, the government must close this gap and simultaneously meet its original revenue target for the second half of the year, which will be difficult to achieve,” he said.
The IFS noted that evidence over the past eight years had shown that raising revenue and grants to reach 16 per cent of GDP had been elusive.
Against this background, Mr Leslie indicated that the government’s goal of mobilising 16.4 per cent of GDP in 2025 with strategies not different from those deployed over the past years would not yield the needed results.
The IFS has, therefore, called for a reset of the country’s revenue mobilisation strategy by paying much attention to the extractive sector.
That, it noted, could earn the country about US$4 billion annually through production sharing agreement.
COURTESY: theghanareport.com
