The Internal Revenue Service today said the current energy crisis has not changed the trend of revenue collection in the first quarter of the year but the impact will unfold in the course of the year. In an interview with Mr David Adom, Commissioner of IRS said a comparative analysis of the revenue trend for the last four years shows that the first three months' collection for 1998 is an improvement on the average of 19 per cent. Against an annual target of 850 billion cedis, the collection for the quarter was 173.11 billion cedis, representing 20.36 per cent of the annual target. During the same period last year, Mr Adom said, the IRS collected only 14 per cent -- 91.82 billion cedis -- out of the annual target of 635 billion cedis while 20.2 per cent of 1996 target of 400 billion cedis was achieved that year. IRS however says it expects a reduction in planned collection starting from the second quarter. The anticipated shortfall would be due to slack performance in manufacturing, mining, self-employed small businesses and taxes on employment income. Mr. Adom said the slide in world market price of gold and the energy crisis will slow down the mining industry's production and revenue contribution to the national coffers. The sector's main contribution comes from mineral royalties and taxes on employment income. The commissioner also says they expect the reduction in mineral production to be accompanied by a proportionate decrease in labour force, adding that this would lead to revenue loss from the "Pay As You Earn" system. The manufacturing sector which is another major employer and contributor to taxes from employment income will add to the national revenue slump. Corporate tax from the manufacturing sector is about 15 per cent of annual total collection and the revised tax revenue projections received from some of these companies are as low as 17 per cent of their initial projections. "We therefore expect a significant reduction in the payment of corporate tax," Mr Adom said. The IRS said the only major contributors to tax revenue, which have not been severely affected by the energy crisis, are the financial sector. However, the IRS feels that low production by the mines and manufacturing companies and the general slow-down in business activities will affect the profit levels of the financial institutions and may reduce their contributions to the national revenue.
The Internal Revenue Service today said the current energy crisis has not changed the trend of revenue collection in the first quarter of the year but the impact will unfold in the course of the year. In an interview with Mr David Adom, Commissioner of IRS said a comparative analysis of the revenue trend for the last four years shows that the first three months' collection for 1998 is an improvement on the average of 19 per cent. Against an annual target of 850 billion cedis, the collection for the quarter was 173.11 billion cedis, representing 20.36 per cent of the annual target. During the same period last year, Mr Adom said, the IRS collected only 14 per cent -- 91.82 billion cedis -- out of the annual target of 635 billion cedis while 20.2 per cent of 1996 target of 400 billion cedis was achieved that year. IRS however says it expects a reduction in planned collection starting from the second quarter. The anticipated shortfall would be due to slack performance in manufacturing, mining, self-employed small businesses and taxes on employment income. Mr. Adom said the slide in world market price of gold and the energy crisis will slow down the mining industry's production and revenue contribution to the national coffers. The sector's main contribution comes from mineral royalties and taxes on employment income. The commissioner also says they expect the reduction in mineral production to be accompanied by a proportionate decrease in labour force, adding that this would lead to revenue loss from the "Pay As You Earn" system. The manufacturing sector which is another major employer and contributor to taxes from employment income will add to the national revenue slump. Corporate tax from the manufacturing sector is about 15 per cent of annual total collection and the revised tax revenue projections received from some of these companies are as low as 17 per cent of their initial projections. "We therefore expect a significant reduction in the payment of corporate tax," Mr Adom said. The IRS said the only major contributors to tax revenue, which have not been severely affected by the energy crisis, are the financial sector. However, the IRS feels that low production by the mines and manufacturing companies and the general slow-down in business activities will affect the profit levels of the financial institutions and may reduce their contributions to the national revenue.
