2010 Petroleum Revenue: - Worst Performance In 7 years

By J. Ato Kobbie, Managing Editor

Ghana’s revenue earnings from petroleum tax for 2010, recorded the worst performance over the last seven years, data available from the Ghana Revenue Authority (GRA) reveals.

The actual total revenue collected from petroleum tax in 2010 was 274.66 million Ghana cedis, representing a shortfall of 22.1% against the targeted revenue of 352.37 million Ghana cedis set for the year.

The shortfall of 22.1% in petroleum revenue for 2010 also represented the worst deviation from set targets for that year and the only tax type that suffered a decline over 2009 performance.

All other tax types recorded growth over 2009 performance. The amount compares unfavourably with what was collected in 2008 and 2009, where 396.54 million Ghana Cedis and 283.52 million Ghana cedis were respectively collected. The year 2007, with GHC455.94 million in petroleum revenue, recorded the highest earnings over the seven-year period, followed by 2006, which recorded 415.17 million Ghana cedis.

Analysts at the GRA attribute the non-attainment of the set target and drop below 2009 performance to the “non-implementation of debt recovery levy from GHC0.02 to GHC0.05 per litre and the drastic reduction in tariffs on petroleum products in March 2009.”

The debt recovery levy, was however increased to GHC0.08 from January 4th this year. As far as meeting set targets was concerned, however, 2009 which had a target of 436.20million Ghana cedis recorded the worst performance during the period, with a total revenue collected amounting to 283.52 million, which translates into a shortfall of 35% for that year.

Whereas both Direct and Indirect Domestic taxes exceeded targets set by 9.2% and 11.0% respectively, Customs Duties which comprises Import Duties, Import VAT and Import National Health Insurance Levy (NHIL), recorded a shortfall of 10.4%. The shortfall in Customs duties resulted from a lower volume of imports that was taxed during the year.

The 2010 import revenue, nonetheless recorded a growth over the preceding year’s amount of 1,799.35 Ghana cedis by 20.5% with 2,167.49 Ghana cedis. The GRA narrowly squeezed through its total tax revenue target of 5,916.05 million Ghana Cedis set for the year, exceeding it by 0.5% at 5,944.71 million Ghana cedis.

Meanwhile, analysts continue to debate over whether revenue targets, which are set for the revenue collecting agencies by a multiple of institutions, are realistic or not. j.atokobbie@yahoo.com