Govt confirms that it spends more money than it raises

Government says it raised KR5.1 billion from January  to March, 2013 in terms of revenues and grants while expenditure totalled KR8.1 billion and regretted that what is raised  it was below target by 13.6 percent.

Secretary to the Treasury Fredson Yamba says during the same  revenue performance period, government projected to collect a total of KR5.9 billion as revenues and grants but a sum total of KR5.1 billion was collected .

And Mr. Yamba says that in the second quarter, the Treasury expects to raise KR6.8 billion and plans to spend KR7.2 billion leaving a balance of KR0.4 billion.

Mr. Yamba says the balance was financed through programmed domestic and foreign borrowing.

He explained that the performance was particularly affected by lower than expected collections on company income tax.

This is contained in a press statement issued by Ministry of Finance Public Relations Officer, Chileshe Kandeta and released to ZANIS in Lusaka today.

Secretary to the Treasury said total domestic revenues collected during the period under review amounted to KR5 billion of which tax revenues amounted to KR4.7 billion and non-tax revenues amounted to KR245.7 million in which Government projected to raise a total of KR5.3 billion as tax revenues.

He said Income tax revenues amounted to KR2.6 billion but the funds were below the target of KR2.9 billion representing an under performance of 9.4 percent that was affected by collections from mining corporate tax collections that were also below target by KR416.6 million or 41.7 percent.

He stated that Value Added Tax (VAT) recorded a collection of KR1.2 billion while Customs and Excise totalled KR949.6 million.

He added that Government expected to receive KR351.6 million as grants for both budget and project support during the period under review.

On expenditure performance, Mr. Yamba said during the period under review, a total of KR8.1 billion was released against a target of KR8.2 billion.

He said the released funds went towards facilitating constitutional and statutory expenditures such as salaries and grants, as well as programme implementation coordinated by various Ministries Provinces and Spending Agencies (MPSAs).

He said in terms of debt service payments, a total of KR816.3 million was released of which KR441.7 million was spent on domestic debt service on Government bonds and Treasury Bills  while KR374.6 million was channelled for external debt.

He said other notable expenditures included KR825.7 million for road construction and maintenance which represented 32.7 percent of the domestically financed Road Sector Budget.

In addition,   KR247.7 million was released for the Farmer Input Support Programme (FISP) outstanding bills arising from the 2012/2013 farming season.

Mr. Yamba said government faced some challenges in terms of lower projected revenue inflows particularly in respect of company income tax which under-performed resulting in the Treasury having to scale down some planned releases for the quarter.

He  has  however hinted that government would address in the coming quarters institutional coordination mechanisms that are being put in place by the Government.

He says the key lesson learnt from budget performance in the first quarter is the need for enhancing revenue collection measures so as to effectively implement and manage development programmes.

The Secretary to the Treasury expressed hope that during the rest of the year, the treasury will continue to closely monitor and evaluate budget and economic affairs to ensure that national development programmes are on course in all MPSA’s.

“I take this opportunity to encourage all the MPSA’s to continue promoting best practice and ensuring sustained transparency and accountability in the utilization of public resources, for the general improvement in the well-being of the people of Zambia,” said Mr. Yamba.

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