Ghana's Revenue agencies to be integrated

Government of Ghana is to integrate the three revenue collecting agencies under the umbrella of a single Ghana Revenue Authority in 2010, Dr. Kwabena Duffuor, the Minister of Finance and Economic Planning has announced.

“Drawing on international experience, legislation to establish the Ghana Revenue Authority has been drafted and approved by Cabinet and will form part of the e-Ghana project,” the Minister said.
The three revenue agencies are Value Added Tax (VAT), Customs Excise and Preventive Services (CEPS) and Internal Revenue Service (IRS).

The integration of revenue functions will address the problem of duplication and streamline operational policies and procedures.

It is also to minimise administrative cost, reduce compliance cost for taxpayers, and generally improve efficiency - which will boost the national revenue target.

Dr. Duffuor, presenting the 2010 budget statement in Parliament, announced that government will introduce new taxes and levies to establish the right prices for natural and environmental capital, hence generating more government revenue while providing the right incentives for reducing environmental degradation.

Royalties paid by mining companies are to be increased from three percent to six percent.

Certain duties on food items that were phased out by past administrations are to be brought back in line with the customs and excise duties Act 2000 (Act 578). Among them are levies on rice and poultry.

Similarly tariffs will be introduced on textiles to check dumping in the economy while studies are already underway to assess the impact of re-imposing taxes on petroleum products.

Government’s total revenue and grants for the 2010 fiscal year is estimated at GH¢9.6bn, equivalent to 37.1 percent of the projected Gross Domestic Product (GDP) for the year. This amount reflects an increase of 33.4 percent over the projected outturn for 2009.

Again, domestic revenue is expected to increase by 37.8 percent over the outturn for 2009, and grants by 12percent. This will bring total domestic revenue to GH¢8.3bn, equivalent to 31.9 percent of the projected GDP for the year. Grants will amount to GH¢1.4 bn, equivalent to 5.3 percent of the projected GDP for the year.

The tax revenue is also anticipated to increase by 20.2 percent over the outturn in 2009, to GH¢6.1bn. This figure represents 23.4 percent of the projected GDP. Non-tax revenue will amount to GH¢1.9 bn, representing 7.4 percent of the projected GDP and an increase of 157.6 percent over the 2009 outturn.

Measures will also be introduced to modernise the Ghana tax system and enhance revenue administration reform, among others, to plug loopholes - reducing tax evasion, and tax rents from natural resources fairly to make the tax system more efficient and less dependent on indirect taxes.