Ghana tax revenue to Gross Domestic Product (GDP) ratio is expected to increase in 2022 to 16.5%, from 14.7% in 2021, the International Monetary Fund’s April 2022 Fiscal Monitor has revealed.
This will be a vast improvement compared to the rates registered during the last 10 years.
In 2023 and 2024, the country’s tax-to-GDP ratio will however fall to 16% and 16.2% respectively.
The nation recorded 14.6%, 13.1%, 13.6%, 14.1%, 13.9 and 13.3% tax-to-GDP ratios in 2015, 2016, 2017, 2018, 2019 and 2020 respectively.
The expected revenue growth due to a number of measures announced by the government will shore up revenue this year.
These include the implementation and collection of the revised Property Rate and the implementation of the E-VAT/E-Commerce/E-Gaming initiatives by the end of April 2022.
Others are the prioritisation the Revenue Assurance, Compliance, and Enforcement (RACE) Programme to plug revenue leakages especially at the ports and the infamous fuel bunkering and small scale mining exporters cabal.
The Electronic Transaction Levy (E-levy) is also expected to generate some revenue for the country.
Meanwhile, the IMF said government expenditure to GDP will reduce marginally in 2022, despite the drastic cut in spending.
According to the Fund, government expenditure will decline to 25.2% of GDP in 2022, from 26.3% recorded in 2021.
This is expected to put the fiscal deficit to GDP ratio at 9.8%.
However, in 2023 and 2024, the Fund is forecasting expenditure-to-GDP ratio of 25.2% and 23.9% respectively.
In the last eight years, the year with the lowest government expenditure-to-GDP ratio was 17.6% in 2017.
From 2015 to 2020, the country’s expenditure to GDP ratios were 18.6% (2015), 19.9% (2016), 17.6% (2017), 20.9% (2018), 21.1% (2019) and 29.0% (2020) respectively.