Windfall from petroleum sector will be used to address revenue gaps
Government has announced that it intends to use the windfall from the petroleum sector to address revenue gaps and aggressively improve its revenue mobilization drive.
This was announced by the Minister of Finance, Ken Ofori-Atta during his presentation of the 2022 Mid-Year Budget Review in Parliament on Monday, 25th July, 2022.
According to him, this is part of broader fiscal measures to return the economy to a sustainable path as it seeks to secure a deal with the International Monetary Fund to support the economy.
“Mr. Speaker, we have seen some major shifts in our budget assumptions compared to November, 2021, when we presented the Budget. These changes have led to reduced revenues, increased interest payments and changes in interest rates and exchange rates. However, we are committed to staying within the appropriation for 2022.
In spite of the underperforming revenues and strong external headwinds, we are not seeking additional funds in this Mid-Year Review. We are determined to efficiently use the windfall from the upstream Petroleum Sector to make-up for our revenue shortfall and aggressively improve our revenues even as we rationalize expenditures,” he said.
Government’s revenue measures outlined in the 2022 Budget have underperformed, largely due to the delays in passing them and implementing these measures.
Key among the revenue measures is the Electronic Transfer Levey also known as the E-levy.
In a bid to shore up government’s revenue this year, it had hoped to rake in about GH¢7 billion from the collection of the levy, which commenced in May, but the figure was revised downwards to about GH¢4.2 billion.
There, however, appears to be challenges with the amount that the levy is bringing in.
Barely a month after the institution of the levy, a leading member of the New Patriotic
Party (NPP) Gabby Asare Otchere-Darko indicated via a twitter post that the E-Levy was delivering just about 10% of its estimated revenue.
The remark received strong reactions from the minority in parliament as well as some economists.
Despite not seeking additional funds from the budget during the midyear review, Ken offori Atta assured that the government will stay within its limit when it comes to spending in the face of the economic challenges facing the country.