BUDGET recorded deficit in first nine months

Accra, Nov. 16, GNA - Government recorded an increase in budget deficit of 5,059.5 billion cedis for the first nine month of 2006 as against 3,643.0 billion cedis in the corresponding period of 2005. Mr Kwadwo Baah-Wiredu, Finance and Economic Planning Minister, who announced this in the 2007 Budget Statement presented to Parliament on Thursday said the domestic primary balance also recorded a deficit of 3,739.7 billion cedis (3.3 per cent of GDP) compared with a surplus of 653.3 billion cedis (0.7 per cent of GDP) in the same period of 2005. Providing the fiscal details, he said the provisional fiscal outturn for January to September 2006 showed total receipts of 31,929.7 billion cedis, against 23,723.7 billion cedis registered for the same period during 2005.

"This shows a 34.6 per cent increase over the outturn for the corresponding period of 2005.

"The relatively high outturn of total receipts recorded is mainly due to receipts from the Multilateral Debt Relief Initiative (MDRI) totalling 1,826.4 billion cedis."

He said for year 2006 as a whole, total receipts were projected at 41,357.1 billion cedis, showing an outturn of 4.9 per cent below the budget estimate of 43,468.2 billion cedis.

"Domestic revenue as at the end of September 2006 was 16,696.3 billion cedis, 7.1 per cent lower than the programmed amount of 17,963.6 billion cedis.

"This outturn was, however, 9.6 per cent higher than the amount of =A215,235.1 billion recorded for the same period in 2005," Mr Baah-Wiredu said.

The entire year of 2006, however, has projected domestic revenue of 25,421.5 billion cedis as against a budget estimate of 26,438.8 billion cedis.

He said of the domestic revenue, the outturn for tax revenue up to the end September 2006 was 15,424.6 billion cedis, against a programmed target of 16,408.6 billion cedis.

The performance of tax revenue, Mr Baah-Wiredu said, indicated an increase of 11.3 per cent over the performance for the corresponding period in 2005.

Direct taxes, which comprise personal, self-employed, company taxes and others such as airport tax amounted to A24,699.4 billion, being 10.2 per cent higher than the outturn for the same period in 2005. He said indirect taxes for the period totalled 7,562.9 billion cedis against a programmed target of 8,533.9 billion cedis.

He said in spite of the under performance, the outturn indicated an increase of 11.6 per cent over the outturn for the corresponding period in 2005.

Domestic VAT for the first three quarters of the year amounted to 1,591.4 billion cedis, against a programmed target of 1,607.5 billion cedis showing an outturn of 27.8 per cent higher than that for the corresponding period in 2005.

Giving the current trends, Mr Baah-Wiredu said the 2006 Budget estimate for Domestic VAT would be achieved by the end of the year. The outturn for International Trade Taxes for the period under review, however, recorded 3,162.2 billion cedis, representing a shortfall of about 3.2 per cent of the programmed amount.

The amount was, however, 12.5 per cent higher than the outturn for the same period in 2005.

International trade taxes are projected to be 318.0 billion cedis higher than the projected amount of 4,858.5 billion cedis indicated in the 2006 Budget estimate.

Of the total international trade taxes, Export Duty, which was mainly cocoa duties for the period under review, amounted to 328 billion cedis, representing a 3.1 per cent increase over the outturn for the same period in 2005.

Mr Baah-Wiredu said due to improved performance of cocoa, it was projected that by the end of the year export duty would amount to 1,246.3 billion cedis.

Mr Baah-Wiredu said import VAT for the period under review totalled 2,404.5 billion cedis, about 4.9 per cent higher than the outturn for the corresponding period in 2005.

He said the National Health Insurance Levy (NHIL) amounted to 785.4 billion cedis, 28.4 per cent lower than the programmed target of 1,096.5 billion cedis and 9.8 per cent lower than the outturn for the same period in 2005.

Mr Baah-Wiredu said receipts from Non-Tax Revenue for the period under review, amounted to 486.3 billion cedis, exceeding the Budget target by 27.9 billion cedis.

This outturn was, however, 5.0 per cent lower than the outturn for the same period in 2005 adding, "Non-Tax revenue receipts are, nonetheless, expected to meet the 2006 Budget projection of 711 billion cedis".