Revenue and grants fall short of target

Ghana’s total revenue and grants for the second quarter of 2024 reached GH¢74.65 billion, representing 7.1% of Gross Domestic Product (GDP), according to the Bank of Ghana’s Monetary Policy Report. This figure was slightly lower than the government’s target of GH¢76.07 billion, or 7.2% of GDP, marking a 1.9% shortfall. Despite this, the revenue achieved a substantial year-on-year growth of 24.6%.

Domestic Revenue Performance

Domestic revenue contributed GH¢74.19 billion (7.1% of GDP), marginally below the expected GH¢74.41 billion. Tax revenue, however, exceeded expectations, amounting to GH¢59.70 billion (5.7% of GDP), just above the target of GH¢59.30 billion, showing a 0.7% overperformance.

Tax Revenue Breakdown

Taxes on income and property, which include personal income tax, company taxes (including oil taxes), and royalties from oil and minerals, reached GH¢28.68 billion (2.7% of GDP), surpassing the GH¢27.44 billion target by 4.5%. The report highlights that all components in this category exceeded their targets, except for “Personal Taxes” and “Company Taxes on Oil.” This marks a significant 20.8% year-on-year increase compared to the GH¢23.73 billion collected in the second quarter of 2023.

Taxes on domestic goods and services, including domestic VAT, excise duty, and other levies, fell short of the GH¢28.30 billion target, bringing in only GH¢25.97 billion (2.5% of GDP). However, this represents a 24.2% year-on-year growth.

Non-Tax Revenue

Non-tax revenue stood at GH¢11.27 billion, 3.4% below the target of GH¢11.66 billion. Despite missing the target, it posted an impressive 36.5% year-on-year growth, mainly driven by higher-than-expected dividend payments, which helped mitigate underperformance in “Fees & Charges.”

International Trade Taxes

Taxes on international trade, primarily import duties, brought in GH¢8.39 billion, surpassing the GH¢7.63 billion target by 10%. This also marked a strong 39.1% year-on-year growth.

Other Revenue and Grants

“Other revenue” reached GH¢2.54 billion, falling 15.1% short of its GH¢2.99 billion target but still recording a 4.1% year-on-year growth compared to the GH¢2.44 billion collected in the same period of 2023.

Grants amounted to GH¢457.3 million, significantly below the expected GH¢1.65 billion, resulting in a 72.3% shortfall. This was also lower than the GH¢864.7 million in grants received during the corresponding period in 2023. The performance in the second quarter reflects a combination of challenges and positive growth trends in Ghana’s revenue collection, with notable gains in tax revenue offset by underperformance in non-tax revenue and grants.