2022 Budget Expectations: Revenue targets not sufficiently ambitious - IEA

The Institute of Economic Affairs (IEA) says government must set ambitious revenue targets in the 2022 budget and work had at mobilizing more revenue domestically.

“Ghana has a serious challenge with domestic resource mobilization. Year after year, domestic revenue falls short of budget targets. Meanwhile, the revenue targets themselves are also not sufficiently ambitious vis-à-vis the country’s needs,” the economic policy think-tank said of its expectations for the 2022 Budget and Economic Planning expected to be presented to Parliament next month.

“The consequence of failing to raise enough domestic resources is that we have to resort to borrowing, which has caused our debt to continue to mount.

Using the 2021 budget as an example, tax revenue and total revenue were projected at GH¢56 billion ($9.7 billion) and GH¢72 billion ($12.4 billion) respectively. These figures are small when juxtaposed with our huge economic and social needs. Measured as ratios of GDP, which are usually used for international comparisons, tax revenue and total revenue were 12.7% and 16.5% respectively”, it stressed.

The IEA proposed that government should be firm in addressing illicit financial flows, curb tax fraud, and address the age-old problem of tax exemptions.