The government recorded about 42% increase in total revenue from the first quarter (Q1) to the second quarter (Q2), according to data from the Finance Ministry.
The revenue figures reveal a notable surge, from GHS 7,836,251,007 in Q1 to GHS 11,125,051,450 in Q2, resulting in a quarterly difference of GHS 3,288,800,443.
The key drivers of this growth were taxes on domestic goods and services, which jumped by GHS 1.5 billion, and income and property taxes, which increased by nearly GHS 1.8 billion.
Furthermore, the first quarter demonstrated stable growth in revenue generation, with a gradual month-on-month improvement.
Month-to-month analysis for Q1
In January, government revenues were strongest in taxes on income and property (GHS 4,639,261,614), with significant contributions from PAYE, self-employed income taxes, and company taxes. Taxes on domestic goods & services raked in GHS 3,031,051,950 where whereas taxes on international trade generated GHS 1,503,257,362 for the government.
February saw a slight increase in overall revenue, with steady growth in taxes on income and property as well as domestic goods and services. However, taxes on international trade decreased slightly compared to January. Taxes on Income & Property raked in GHS 4,672,893,801, taxes on domestic goods & services: GHS 3,060,740,761 and taxes on international trade: GHS 1,236,317,580
March ended the first quarter with the highest revenue for Q1, driven by a boost in taxes on domestic goods and services. The consistent performance of income and property taxes and the recovery of international trade taxes also contributed to this outcome. Taxes on income & property generated GHS 4,625,177,585 for the government, taxes on domestic goods & services: GHS 3,311,670,761 and taxes on international trade: GHS 1,248,347,916.
Month-to-month analysis for Q2
April kicked off Q2 with a moderate increase in revenue compared to March, largely driven by growth in domestic goods and services taxes, as well as improvements in international trade duties. Taxes on income & property brought in GHS 4,518,853,471, taxes on domestic goods & services: GHS 3,611,670,761 and taxes on international trade: GHS 1,436,513,358.
May recorded a substantial increase in total tax revenue. This rise was primarily driven by taxes on income and property, which jumped by GHS 1.5 billion, as well as taxes on domestic goods and services, which also surged. The government generated GHS 6,010,186,166 from taxes on income & property, taxes on domestic goods & services raked in GHS 4,519,182,419 and taxes on international trade: GHS 1,557,350,000.
June saw a slight levelling off in total revenue compared to May, though income and property taxes (GHS 5,051,322,928), along with domestic goods and services (GHS 4,013,743,300), continued to drive the bulk of collections. International trade taxes (GHS 1,505,350,000) remained stable.
The government has set an ambitious target to mobilise a total revenue of GHS 176.4 billion, which is about 22% higher than the 2023 target. From the 2024 budget, tax revenue will comprise 81.1% of the total government revenue.
Ghana’s revenue-to-Gross Domestic Product ratio is expected to exceed 17% year-on-year for the next six years. According to the International Monetary Fund’s April 2024 Fiscal Monitor, the revenue-to-GDP ratio will increase steadily from 2024 to 2029.
In 2024, it is projecting a government revenue-to-GDP ratio of 16.7%, a slight increase from the 15.7% recorded in 2023. Part of the conditions of the $3 billion Extended Credit Facility by the IMF is an increase in revenue generation by the government.