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Zambia Institute of Policy Analysis and Research (ZIPAR) is concerned with the continued underperformance of the non-tax revenue segment.
This is due to the country’s need to attain fiscal sustainability
Herrick Mpuku, ZIPAR Executive Director, said on Wednesday that the poor performance of non-tax revenue was worrying.
Therefore, it was important for Government to explore ways on how this could be enhanced.
Mpuku said this at the 2022 Economic Performance and Outlook for 2023 meeting in Zambia’s capital Lusaka.
“The underperformance of the non-tax revenues is due to the under collections in mineral royalties, and absence of revenues from the Food Reserve Agency proceeds component.
“Mineral royalty collections were five percent below the projected figure of K10.4 billion and stood at K9.8 billion and this was largely on account of lower copper production and appreciation of the Kwacha,” he said.
Read more: Addressing factors hindering effective collection of mining taxes by Ellen Makinishi https://www.zambiamonitor.com/addressing-factors-hindering-effective-collection-of-mining-taxes-by-ellen-makinishi/
Meanwhile, Mpuku stated that ZIPAR remained positive on Zambia’s 2023 economic prospects, provided Government continued to keep the fiscal deficit in check while implementing consistent policies.
He stated that Government also needed to curb some notable expenditure overruns such as road construction if the fiscal deficit target was to be achieved and have a positive outlook in 2023.
Zambia’s fiscal deficit currently stands at K29.2 billion which was above the budgeted figure of K25.2 billion, representing a 6.3 of the Gross Domestic Product (GDP).
He also observed that Government had this year kept the fiscal deficit in check by controlling expenditure.
During the period January to November 2022, total revenue and grants amounted to K91.9 billion and were 8.6 percent above the budget target of K84.7 billion.
“The improved revenue performance is attributed to increased income tax collections,” Mpuku said.
Zambia Institute of Policy Analysis and Research (ZIPAR) Executive Director Herrick Mpuku
He was cognisant of the crucial role of revenue mobilisation in attaining fiscal sustainability, restoring macroeconomic, and achieving economic growth, Government implemented several revenue enhancing measures.
As a result, he said, domestic revenue mobilisation over performed by 8.1 percent, translating to K90.1 billion against a target of K83.3 billion.
Mpuku however expressed concern at the underperformance of the non-tax revenue.
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