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Salone loses US$17m revenue in 2014

October 21, 2015 By Alusine Sesay

“The adverse impact of revenue shortfall is driven largely by lower corporate and personal tax payments. Sales from the largest manufacturing companies that produce cement, soft drinks and beer was also affected due to low business activities in restaurants, entertainment and construction sub-sectors,” states the Country Note on the African Economic Outlook.

The report commends the country’s fiscal policy spanning from 2013 to the beginning of 2014, noting that the fiscal deficit was contained at 2.4% of Gross Domestic Product in 2013.

“Fiscal policy has been robust with good progress made towards fiscal consolidation in 2013 and the beginning of 2014. The fiscal deficit was contained at 2.4% of GDP in 2013,” it adds.

The report further commends measures undertaken by the government, which it says resulted in strengthened budget credibility with the budget executed according to plan and good progress made in reducing stock of year-end expenditure arrears.

However, the report notes that: “The Ebola Virus Disease outbreak could reverse these gains as the deficit will be higher than anticipated in view of projected revenue shortfalls and additional spending to contain the outbreak. Revenue performance was below the first half-year IMF target with a shortfall of US$17 million.”

It adds: “The outbreak of the Ebola disease and its dampening effect on economic activity adversely affected domestic revenue mobilization, especially in the second half of 2014.”

The report projects revenue shortfall in the mining sector, especially in the area of Pay As You Earn (PAYE) due to poor tax payer compliance.

“Revenue is expected to be US$46 million less (1% of non-iron or GDP) that originally forecast, and US$91 million less (1.6% of non-iron ore GDP in 2015). Total revenue has been consistently lower than expenditure,” says the report.

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