Student of University of Cape of Coast

Topics: Tax, Public finance, Government spending Pages: 3 (892 words) Published: May 13, 2013
Fiscal policy refers to the government’s choices regarding the overall level of government purchases and taxes. Fiscal policy is undertaken by government to manage, control and manipulate the economic variables in the economy like inflation, unemployment, consumption and so many more. The fiscal operations that has been taken place for the past decade in Ghana In the year 2000, Total revenue and grants amounted to 5,385.0 billion while total expenditure came to 7,524.9 billion. Out of an estimate of 1,319.0 billion, only 574.3 billion actually flowed in. Tax revenue collections exceeded the original projections on account of good performance from direct taxes, indirect and trade taxes. The provisional actual tax revenue yielded 3,731.7 billion as against an estimate of 3,957.3 billion. Provisional figures for 2000 indicate an overall balance of payments deficit of US$194.8 million, compared with an initial projected zero balance. In 2001, Provisional outturn for 2001 indicates that overall fiscal balance was a deficit of 4.4 per cent of GDP. Tax revenues exceeded the budget projections of ¢6,255.2 billion by ¢301.7 billion, because of better-than-programmed yield from value added taxes and import duties. Provisional fiscal data show total statutory payments of ¢5,474.5 billion and discretionary payments of ¢6,206.3 billion. These are lower than the respective targets of ¢5,574.8 billion and ¢7,498.7 billion. In 2003, The receipt of ¢3,118.8 billion, in total grants including multilateral HIPC relief in 2003 represented a disbursement rate of almost 98percent, the highest in many years. Compositionally, tax revenue exceeded the target of ¢12,556.3 billion by ¢205.8 billion. Also, real GDP growth was higher than expected — 5.2 per cent against a projected 4.7 per cent. The overall budget deficit was contained at 3.4 per cent of GDP against the targeted 3.3 per cent of GDP. In 2004, Revenue has increased from ¢4.4 trillion representing 16.3...
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