"Deloitte Warns of Revenue Risks Despite Upward Revision of 2025 Targets"

Deloitte Warns of Revenue Risks Despite Upward Revision of 2025 Targets

Deloitte Ghana has cautioned that persistent underperformance in Grants, Petroleum Receipts, and Import Duties could derail the government’s efforts to meet its revised 2025 revenue target, despite gains in other tax handles.

The advisory firm, in its post-analysis of the 2025 Mid-Year Budget Review, noted that while revenue from Non-Oil Tax, Corporate Income Tax, and Mineral Royalties have shown strong outturns, these gains may be insufficient to offset shortfalls in other critical revenue lines.

“We note that the downward trend in exchange rates, whilst being favourable in some respect, has weakened revenue performance across specific components like the petroleum receipts and import duties since material portions of these are indexed in USD,” Deloitte stated.

It added that in the face of these losses, government must either implement compensatory expenditure cuts or introduce new revenue-enhancing measures to protect the fiscal stability achieved in the first half of the year.

Underperformance Amid Upward Revision

Government, in the Mid-Year Budget, revised its total revenue and grants projection for 2025 from GH¢227.1 billion (16.2% of GDP) to GH¢229.9 billion (16.4% of GDP), reflecting a 1.3% increase.

The projected additional GH¢2.9 billion is anticipated from revenue adjustments linked to amendments in the Energy Sector Levies Act, 2025 (Act 1135).

However, provisional data for the first half of the year shows that Total Revenue and Grants amounted to GH¢99.3 billion—falling short by 3.2% compared to the target of GH¢102.6 billion.

Deloitte attributes the variance primarily to lower-than-expected inflows from Non-Tax Revenue, Oil and Gas Receipts, and Grants.

Despite the shortfall, the GH¢99.3 billion outturn still represents a significant 30.5% year-on-year growth over the same period in 2024, indicating underlying momentum in some revenue segments.

Fiscal Policy Implications

The advisory firm’s commentary adds to growing concerns around Ghana’s fiscal consolidation efforts, particularly in light of exchange rate movements and their implications for dollar-indexed revenues.

Deloitte’s recommendation signals a need for careful fiscal calibration in the second half of the year to ensure the revised targets are met without compromising macroeconomic stability.