IEA says gov’t unable to achieve 2017 revenue target
The Nana Addo-led government will not be able to meet its revenue target for the 2017 financial year.
This is a prediction made by the Institute of Economic Affairs.
A Senior Research Fellow at the IEA Dr Eric Osei-Assibey said this is despite the downward review of the target.
Analysing the presentation by the Finance Minister, Dr Osei-Assibey said the country is likely to end the year 2017 with a debt to GDP ratio of 71percent, about a two-percentage point reduction of what was recorded last year.
“Despite the debt management effort by government, we think that the debt stock is still very high and unsustainable.”
“Although the government has revised downwards its revenue projections for the second half of the year, we believe that government may still not realise the projected revenue as the above challenges remain,” he predicted.
He, therefore, called on the government to “pursue a more aggressive domestic tax revenue mobilisation by ensuring that the compliance rate is increased substantially and the loopholes within the tax collection systems are plugged.”
He said more effort and innovations must be introduced “in the tax collection system particularly within the informal economy.”
The Finance Minister, Ken Ofori Atta revealed that the country’s fiscal deficit target for 2017 has been reviewed from 6.5percent to 6.3percent of GDP when he presented the mid-year budget review to Parliament.
“The downward revision in revenues and expenditures, as well as reclassification of inflows from the sale of shares, have resulted in the revision of the fiscal deficit target from 6.5 percent of GDP to 6.3 percent. These revisions are consistent with our fiscal and debt sustainability objectives.”
“Being mindful of the high debt burden which has arisen largely because of high fiscal deficits in the past, the revision of the fiscal deficit further demonstrates our commitment to fiscal discipline,” he told parliament.
“Going forward, we will strengthen the implementation of revenue measures to ensure that we meet our revised revenue targets. To ensure that the fiscal objectives and targets are not compromised, we will make the necessary downward adjustment to discretionary expenditures in the event that we are not able to meet our revenue targets,” he added.