GOVERNMENT MUST BE ACTIVE IN RAISING REVENUE: THE 2014 BUDGET STATEMENT OF GHANA
As I read through the 2014 Budget statement presented to parliament by the Government of President Mahama, I keep asking myself a few questions. My quest to find answers to these questions has lead me to engage in an examination of the budget, whiles making projections into its viability and otherwise.
Government of Ghana needs about 30, 544,300,000.00 (30.5 billion)to run government for the year 2014. (Page 31 of the 2014, budget statement)This appears to be a colossal amount. Meanwhile, on page 43 of the statement, we find that total revenue plus grants has been pegged at 26,001,900,000.00 (26 billion). The statement is suggesting that The Ghana Revenue Authority with its appendixes (VAT, CEPS etc) cannot raise GHC 30 billion for the management of the nation for the year 2014. The GHC 26 billion is even inclusive of expected grants from donor countries and international bodies.
This appears very funny to me that Government of Ghana will need to go round the world to seek loans before it can meet this budget when we have over 10,000,000 people in the labor force of Ghana. In my opinion, it is only at the heights of naivety and or incompetence on the part of Government and revenue collectors if they claim not to be corrupt.
Let’s do a little calculation together. There were 14,000,000 registered voters in Ghana for the 2012 elections. This is enough evidence that Ghana has over 14m people above the age of 18. Let us assume that a huge chunk of these people are in the group of pension/ retirement and those in School. For the purposes of this calculation, I estimate 4m in that category. This leaves a colossal 10m people between the ages of 18 and 60. (Labor force). Let us assume that 50% of this 10m people are also unemployed. This leaves 5m who are working and has to be taxed.
According to the NDC government, Ghana is now a middle income status country. Per World Bank Standards, the average income of the middle income sates is $1,879.00 per month. This translates to GHC 3,758.00 per month. Income tax in Ghana is at the rate of 25% according to ACT 592. Twenty five per cent of 3,758 is GHC 939.5. If this is multiplied to an estimated 5m in the labour force, we should get GHC 4,697,500,000.00 (4.6 billion) on a monthly basis. This figure multiplied by 12 months will give Ghana 56,370,000,000.00 (56.3 billion) in the year 2014. This alone is almost twice the amount the government needs to work for the whole year.
Again, we are told by the statistics for CEPS that the Tema and Tarkoradi Ports clear a minimum if 500 cars on a daily basis in Ghana. It is common knowledge that the smallest car in Ghana, Nissan March cost about GHC 5,000 to clear from the port. We also know that Big trucks like and some SUVs like the range rover can cost up to GHC 50,000 to clear from the ports. Let us assume again that the average cost of clearing a car from the port is GHC 7,000 which is on the lower side. 500 by 7000 is GHC 3,500,000.00 on the daily basis from the two ports for only cars. Clothes and other things have not been factored in yet. 3,500,000 by 20 working days in the month is GHC 70,000,000.00 in a month. This translates into 840,000,000 (840 million) in a year.
Other sectors like Oil, Mining, Road toll etc have not been considered yet. But this is enough evidence to show how ineffective our government is.
With all these potentials, our government has to go out to seek after 3billion Chinease loan. I wonder if our finance ministry together with the Revenue authorities are serious at all.
The PPP has suggested that we need to seal all leakages in government so that we can get enough revenue to run the country yet this is not wisdom to the Mahama lead government.
It is time we explain some of these facts to Ghanaians. If the Ghana Revenue Authority alone is cleansed of all corrupt officials, Ghana can pay it's debts within 10 years whiles still developing at a very fast pace.
AWAKE.
Government of Ghana needs about 30, 544,300,000.00 (30.5 billion)to run government for the year 2014. (Page 31 of the 2014, budget statement)This appears to be a colossal amount. Meanwhile, on page 43 of the statement, we find that total revenue plus grants has been pegged at 26,001,900,000.00 (26 billion). The statement is suggesting that The Ghana Revenue Authority with its appendixes (VAT, CEPS etc) cannot raise GHC 30 billion for the management of the nation for the year 2014. The GHC 26 billion is even inclusive of expected grants from donor countries and international bodies.
This appears very funny to me that Government of Ghana will need to go round the world to seek loans before it can meet this budget when we have over 10,000,000 people in the labor force of Ghana. In my opinion, it is only at the heights of naivety and or incompetence on the part of Government and revenue collectors if they claim not to be corrupt.
Let’s do a little calculation together. There were 14,000,000 registered voters in Ghana for the 2012 elections. This is enough evidence that Ghana has over 14m people above the age of 18. Let us assume that a huge chunk of these people are in the group of pension/ retirement and those in School. For the purposes of this calculation, I estimate 4m in that category. This leaves a colossal 10m people between the ages of 18 and 60. (Labor force). Let us assume that 50% of this 10m people are also unemployed. This leaves 5m who are working and has to be taxed.
According to the NDC government, Ghana is now a middle income status country. Per World Bank Standards, the average income of the middle income sates is $1,879.00 per month. This translates to GHC 3,758.00 per month. Income tax in Ghana is at the rate of 25% according to ACT 592. Twenty five per cent of 3,758 is GHC 939.5. If this is multiplied to an estimated 5m in the labour force, we should get GHC 4,697,500,000.00 (4.6 billion) on a monthly basis. This figure multiplied by 12 months will give Ghana 56,370,000,000.00 (56.3 billion) in the year 2014. This alone is almost twice the amount the government needs to work for the whole year.
Again, we are told by the statistics for CEPS that the Tema and Tarkoradi Ports clear a minimum if 500 cars on a daily basis in Ghana. It is common knowledge that the smallest car in Ghana, Nissan March cost about GHC 5,000 to clear from the port. We also know that Big trucks like and some SUVs like the range rover can cost up to GHC 50,000 to clear from the ports. Let us assume again that the average cost of clearing a car from the port is GHC 7,000 which is on the lower side. 500 by 7000 is GHC 3,500,000.00 on the daily basis from the two ports for only cars. Clothes and other things have not been factored in yet. 3,500,000 by 20 working days in the month is GHC 70,000,000.00 in a month. This translates into 840,000,000 (840 million) in a year.
Other sectors like Oil, Mining, Road toll etc have not been considered yet. But this is enough evidence to show how ineffective our government is.
With all these potentials, our government has to go out to seek after 3billion Chinease loan. I wonder if our finance ministry together with the Revenue authorities are serious at all.
The PPP has suggested that we need to seal all leakages in government so that we can get enough revenue to run the country yet this is not wisdom to the Mahama lead government.
It is time we explain some of these facts to Ghanaians. If the Ghana Revenue Authority alone is cleansed of all corrupt officials, Ghana can pay it's debts within 10 years whiles still developing at a very fast pace.
AWAKE.
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