Tax revenue is expected to yield additional GH?339.2 million during the year, raising the ratio of tax revenue to Gross Domestic Product (GDP) from 16.7 per cent in 2011 to 18.0 per cent in 2012.
The rise is largely due to improvements in tax administration, including strengthened customs management and streamlining of tax exemptions, Dr Kwabena Duffour, Minister of Finance and Economic Planning said on Wednesday.
He was presenting the Mid-Year Review and Supplementary Estimates for the 2012 Budget on the floor of Parliament in Accra.
Dr Duffuor said the Government was expecting additional tax revenue following the changes to the tax regime for mining.
“Corporate tax on mining was increased from 25 per cent to 35 per cent in the 2012 Budget, and a uniform regime for capital allowance of 20 per cent for five years was also announced. These measures are expected to generate additional revenue of GH¢175.0 million,” he said.
On personal income tax, Dr Duffuor said it was expected to yield GH¢69 million more than what was estimated in the 2012 Budget, but self-employed tax revenue would drop by GH¢27 million.
“This will give a net additional income tax revenue of GH?42.0 million for the year,” he added.
Dr Duffuor said import VAT revenue had been revised upwards by GH¢105.5 million but added that revenue from domestic VAT was expected to fall by GH¢107 million.
He observed that revenue from international trade taxes had been revised upwards by GH?150.6 million, stressing that it comprised of GH¢63.2 million.
Dr Duffuor said cocoa export duty for fiscal year 2011, which was received in the first quarter of 2012, and an upward revision of import duty revenue by GH?87.4 million, was attributed to improved collections.
He said in January this year, Government established a National Mining Re-Negotiation Committee to critically review the mining sector’s fiscal regime and existing mining agreements with the view to ensuring that the country obtained its fair share of the gains from the mining sector.
Dr Duffuor said fees and other charges related to the granting of stability agreements were expected to generate some GH¢525 million as revenue to the Government.
He disclosed that an amount of GH¢55.3 million was also expected to be realised as gains from petroleum hedging activity that commenced in 2010.
Dr Dufuor said government had put in place measures to support expenditure monitoring and control to ensure that excess spending was avoided, especially with the elections coming up later in the year.
He said an Expenditure Monitoring Team had been established to ensure strict compliance to the directives given to Ministries, Departments and Agencies not to commit funds to projects not contained in the budget.
Dr Duffuor said, “the requirement that commencement certificates be secured by Ministries before committing government to any contractual obligation still remains in force,” he added.
On revenue and grants, he said total revenue and grants for fiscal year 2012 had been revised upwards by GH?1,313.2 million to GH?16,927.6 million, adding that the additional revenue would come mainly from increases in non-oil tax revenue, non-tax revenue, and grants.**
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