BUDGET: Divestiture receipts slip

Accra, Nov. 16, GNA - Receipts from Government's divestiture programme for 2006 is expected to fall short of 667.4 billion cedis as against a budget estimate of 673.4 billion cedis.

The shortfall is due to the slow pace in the preparation of State-Owned Enterprises (SOEs) for divestiture on the Ghana Stock Exchange (GSE), Mr Kwadwo Baah-Wiredu, Minister of Finance and Economic Planning, said on Thursday when he delivered the 2007 Budget Statement to Parliament.

Total receipts from divestiture for the first three quarters of the year amounted to six billion cedis.

He said the total receipts for 2006 was projected at A241,357.1 billion and was expected to show an outturn of 4.9 per cent below the budget estimate of A243,468.2 billion.

He said domestic revenue as at the end of September was A216,696.3 billion which was 7.1 per cent lower than the programmed amount of =A217,963.6 billion.

This outturn was, however, 9.6 per cent higher than the amount of =A215,235.1 billion recorded for the same period in 2005. "For the year as a whole domestic revenue is projected at =A225,421.5 billion against a budget estimate of A226,438.8 billion," Mr Baah-Wiredu said.

He explained that out of domestic revenue, the outturn for tax revenue up to the end September 2006 was A215,424.6 billion, against a programmed target of A216,408.6 billion.

"The performance of tax revenue, however, indicates an increase of 11.3 per cent over the performance for the corresponding period in 2005."

Total tax revenues are projected to be lower than the Budget estimate of A221,214.1 billion by A2893.4 billion, equivalent to 3.7 per cent below the Budget estimate for 2006.

Mr Baah-Wiredu said direct taxes, which comprised personal, self-employed, company taxes and others such as airport tax amounted to =A24,699.4 billion or 10.2 per cent higher than the outturn for the same period in 2005.

"However, these tax types are projected to be A27,249.6 billion, slightly lower than the budget target of A27,268.6 billion for the fiscal year."

He said indirect taxes for the first nine months of the year totalled A27,562.9 billion against a programmed target of A28,533.9 billion and added that, "in spite of the under performance, the outturn indicates an increase of 11.6 per cent over the outturn for the corresponding period in 2005.

"It is, however, projected that by the end of 2006 there will be an under performance equivalent to about 12.8 per cent of the Budget projection of A212,087 billion."

On domestic Value Added Tax (VAT), Mr Baah-Wiredu said revenue for the first three quarters of the year amounted to A21,591.4 billion, against a programme target of A21,607.5.

The outturn, he said, was 27.8 per cent higher than the outturn for the corresponding period in 2005.

"On current trends, however, the Budget estimate for domestic VAT is expected to be achieved by the end of the year."

Import VAT totalled A22,404.5 billion for the first nine months of the year, representing about 4.9 per cent higher than the outturn for the corresponding period in 2005.

However, as result of lower import volumes, import VAT is projected to be A23,721.3 billion, A2992.2 billion lower than the Budget estimate for 2006.

Mr Baah-Wiredu touched on the outturn for International Trade Taxes for the period under review and said this amounted to A23,162.2 billion, and represented a shortfall equivalent to about 3.2 per cent of the programmed amount.

The outturn was 12.5 per cent higher than the outturn for the same period in 2005.

He said international trade taxes was projected to be A2318.0 billion higher than the projected amount of A24,858.5 billion indicated in the 2006 Budget estimate and explained that the higher than budgeted receipts are the result of higher cocoa receipts expected for 2006. Of the total international trade taxes, Export Duty which is mainly cocoa duties for the period under review amounted to A2328 billion, representing a 3.1 per cent increase over the outturn for the same period in 2005.

It is projected that by the end of the year export duty will amount to A21,246.3 billion due to improved performance of cocoa and this projected outturn indicates a 201.1 per cent increase over the budget estimate for the year.

Mr Baah-Wiredu said receipts from Non-Tax Revenue for the period under review, amounted to A2486.3 billion, exceeding the Budget target by A227.9 billion. This outturn was, however, 5.0 per cent lower than the outturn for the same period in 2005. Non-Tax revenue receipts are, nonetheless, expected to meet the 2006 Budget projection of A2711 billion.

Receipts from the National Health Insurance Levy (NHIL) also amounted to A2785.4 billion, 28.4 per cent lower than the programmed target of A21,096.5 billion and 9.8 per cent lower than the outturn for the same period in 2005.