Report says Ghana’s energy crisis could hurt tax collection
The energy crisis in Ghana, can affect the country’s tax collection ability, a report has asserted.
In an economic review and assessment update for April 2013, StratLink, an international firm focused on providing strategic and financial advisory services in emerging and frontier markets, reported that the power rationing in Ghana has been affecting businesses as “production levels and revenues take a hit”.
According to the New York-based research group, Ghana’s energy crisis spurred on by the West African Pipeline Company’s gas pipeline damage as well as the closure of one of its power plants has left the country with an energy deficit of around 300 megawatts.
“This is expected to affect tax collection ability,” Stratlink said in its report.
The report said, the Ghana Revenue Authority’s target for 2013 is GH¢15,609.50 million, a 33% increase on 2012’s collection (recorded at GH¢11,743.19 million, exceeding its budgetary target by GH¢300.52 million).
In 2012, Ghana recorded a budget deficit of 12.1%, a situation described by the International Monetary Fund and the African Development Bank as excessive.
Among other reasons, the budget deficit was partly due to lower income taxes, the central bank reported February 13, 2013.
Ghana’s total revenue and grants in 2012 amounted to GH¢16.1 billion (22.3% of GDP) against a budget estimate of GH¢16.9 billion, the Bank of Ghana (BoG) indicated.
The country’s expenditures including arrears clearance and commitments totalled GH¢24.8 billion (34.5% of GDP), 14.7% higher than the budget target.
The IMF in April 2013 raised a concern that the energy crisis could slow Ghana’s growth. “Energy sector problems could curtail growth,” the Fund said April 12, 2013 in a statement.
Ghana’s economy grew at 7.9% in 2012, the Statistical Service said April 10, 2013 after revising GDP provisional estimates.
The growth, according to the GSS was led by the services sector which most often relies on electricity.
By Ekow Quandzie