Mr. Speaker, I beg to move that the House do now resolve into Committee of Supply on the Estimates of Revenue and Expenditure for the year 1st January 2012 to 31st December, 2012 presented to the National Assembly in November 2011.

Sir, I am the bearer of a message from His Excellency the President recommending favourable consideration of the motion that I now lay on the Table.
Mr. Speaker, as I begin this budget address, I wish to acknowledge the macro-economic achievements that the country has attained when the economy was under the stewardship of my predecessor, Hon. Dr. Situmbeko Musokotwane, MP. I would like to pay tribute to him and the previous administrations for laying a strong foundation upon which this Government will build.

Mr. Speaker, 2011 is a landmark year. In September, we held successful elections and had a peaceful transition of power, a rare feat on the African continent. As Zambians, we should be justly proud of this achievement. In October, we celebrated 47 years of independence, regrettably amidst persistently high and unacceptable poverty levels.

Sir, in his address to Parliament, His Excellency, the President outlined an ambitious programme of action to begin his administration’s vigorous and unrelenting fight against poverty. As we embark on the path to transform our nation, hard work is required and difficult choices will have to be made. But, as a nation, we have collectively chosen this path. With this unity of purpose, we are confident that the challenges before us may be intractable but certainly not insurmountable. It is our duty to ensure that the benefits of our recent economic success are felt by every Zambian. Thus, the theme of the 2012 budget is “Making Zambia a better place for all.”

Sir, my speech this afternoon is in four parts. In Part I, I review the global and domestic economy. Part II outlines the macro-economic objectives, policies and strategies for the 2012 budget. In Part III, I present the 2012 budget and I conclude in Part IV

PART I
GLOBAL AND DOMESTIC ECONOMIC REVIEW

GLOBAL ECONOMY

Mr. Speaker, in 2011, the global economy continued its recovery. Annual growth is projected at 4.0 percent slightly lower than the 5.1 percent recorded in 2010. Economic growth was strong in the emerging and developing economies, with growth in Sub-Saharan Africa of 5.2 percent in 2011. In contrast, growth in the advanced economies, at 1.6 percent, continued to be sluggish largely on account of unsustainable sovereign debts in some Euro zone countries and weak demand in the United States of America.
Mr. Speaker, strong growth in emerging economies and political unrest in North Africa and the Middle East have kept international commodity prices high. The average price of copper in the first ten months of 2011 was US $8,704 per tonne, compared to US $7,538 per tonne in 2010. The price of oil has averaged US $109.9 per barrel in the first ten months of 2011, higher than the US $79.0 in 2010. International food prices have also been generally high in 2011 mainly on account of supply constraints.

Sir, high commodity prices present both opportunities and risks to the domestic economy. High copper prices can boost export earnings, facilitate investment and support the fiscal position. Similarly, high food prices present an opportunity for the country to enhance agricultural production, and diversify the export base. In contrast, high oil prices could increase the cost of production thereby increasing inflationary pressures in the domestic economy.

DOMESTIC ECONOMY

Growth and Inflation

Mr. Speaker, preliminary estimates indicate that the economy will grow by 6.5 percent in 2011. This is in line with the initial projection of 6.4 percent. Agriculture, manufacturing, construction, and transport and communications are the main drivers of this growth. Growth could have been significantly higher had the mining sector performed according to projection. I am concerned that the mining sector data do not fully reflect actual production.

Sir, annual inflation has remained in single digits and was 8.7 percent in October, 2011 compared to 7.9 percent in December 2010. The increase in inflation reflected the slight rise in annual food inflation despite a high maize harvest. However, non-food inflation has been fairly unchanged at low double digit levels. The recent reduction in fuel prices, effected by the PF Government, should reduce inflation by the end of the year.

Monetary and Financial Sector Developments

Mr. Speaker, economic activities in 2011 have continued to drive growth in money supply. The annual growth in money supply was 26.8 percent up to September 2011 compared with 23.6 percent during the corresponding period of 2010. This was mainly driven by increased lending to private enterprises, reflecting high confidence and opportunities in the economy.

Sir, with regard to interest rates, returns on Government securities rose mainly on account of higher Government borrowing. Interest rates on Treasury bills increased to 14.2 percent in October 2011 from 8.2 percent in December 2010. Similarly, interest rates on Government bonds edged upwards to 16.2 percent from 11.3 percent. Sir, lending rates in commercial banks have remained high and are not in line with low inflation and relative macroeconomic stability. At the current level, commercial bank interest rates are 300 percent the inflation rate.

Mr. Speaker, high interest rates are a serious constraint to lowering the cost of doing business, increasing access to credit and accelerating private sector growth. This is particularly true for the small and medium scale enterprises which account for the bulk of employment opportunities and growth. In addition, small and medium scale enterprises offer the most powerful weapon to reduce poverty and create a just and equitable society.
Sir, Government’s legitimate expectation is that interest rates will continue the downward trend that started within the first 30 days of the PF assuming Government. The Bank of Zambia has taken steps to enhance the liquidity available to banks by lowering the reserve ratios. This can only be justified with a lower interest rate regime.

Mr. Speaker, the financial sector’s overall performance has been favourable. In the banking sector, asset quality improved due to a reduction in gross non-performing loans. With respect to the non-bank financial institutions, performance and financial condition was rated fair as at end-September 2011.  The sector has continued to record growth with the number of institutions increasing to 95 as at end-September 2011 from 87 at end-September 2010.

Sir, with regard to developments under the Financial Sector Development Plan, access to financial services has increased through the promotion of microfinance services, mobile banking, money transfer services, and rural banking for the financially excluded districts. The number of mobile money service providers increased to 57 as at August 2011 from 29 in December 2010. In addition, the number of districts without banking services declined to 7 as at end-September, 2011 from 14 in December 2010.

Mr. Speaker, in line with the positive economic performance, the Lusaka Stock Exchange is poised to register another year of impressive growth. In the first nine months, the share price index increased by 9.3 percent to 3,823.1, while market capitalization rose by 44.9 percent to K44,802.1 billion. This outturn was partly due to an improvement in net portfolio inflows of foreign capital amounting to US $13.0 million, compared to a net portfolio outflow of US $8.2 million over the same period in 2010.

External Sector Developments

Mr. Speaker, the external sector remained strong. The current account surplus is projected to rise by 54.7 percent to US $951.0 million in 2011 from US $614.7 million in 2010. This is mainly on account of high copper export earnings of US $8.4 billion, up from US $5.8 billion in 2010. Non-Traditional Exports are again expected to register robust growth and are projected at US $1.5 billion in 2011 from US $1.2 billion last year. Consequently, gross international reserves rose to US $2.6 billion as at end-September 2011, representing 4.3 months of import cover.

Sir, the exchange rate of the Kwacha against major currencies exhibited resilience. It depreciated marginally by 4.5 percent to K4,949.8 per US dollar at end-October, 2011 from K4,735.7 per dollar as at end-December 2010. This was despite uncertainties prior to the elections and the strengthening of the US dollar.

BUDGET PERFORMANCE IN 2011

Mr. Speaker, the performance of the budget in 2011 has generally been satisfactory with end year revenues expected to be above target.  However, there have been large pressures on expenditure arising from the need to fund the general elections, increased maize purchases and procurement of fertilizer, among others. Consequently, the overall deficit is expected to be 3.1 percent of GDP, compared to the projection of 2.9 percent.

Sir, preliminary figures as at end-September indicate that domestic revenues at K14,580.2 billion have over performed. This trend is expected to continue and will result in an over performance of 23.2 percent by the end of the year. This performance is mainly attributed to payment of mining tax arrears and improved tax administration.
Sir, general budget support receipts from cooperating partners were projected at K586.5 billion in 2011. As at end-September, K298.8 billion was received and the balance is expected to be received in full by the end of the year.

Mr. Speaker, total expenditure by the end of 2011 is expected to be K24,041.2 billion, 18.8 percent higher than budgeted. This is against the total expected revenues and grants of K20,657.1 billion. The difference will be financed through borrowing.

Domestic and External Debt

Mr. Speaker, as at end-September 2011, Government contracted external loans of US $504.8 million to finance the implementation of infrastructure projects in the roads, energy and agricultural sectors. A net amount of about US $200.0 million was disbursed on new and existing loans. Consequently, external debt rose to US $1.6 billion as at end-September, 2011 from US $1.4 billion in 2010. At this level, the external debt stock is 8.2 percent of GDP, well within sustainable levels.
Sir, as at end-September, 2011, total domestic debt amounted to K13,876.8 billion or 16.1 percent of GDP. Of this amount, K12,820.9 billion is accounted for by government securities while the balance of K1,055.9 billion is accounted for by other public liabilities such as pension arrears, awards and compensation, and arrears to suppliers of goods and services.

PART II
MACROECONOMIC OBJECTIVES, POLICIES  AND STRATEGIES IN 2012

Macroeconomic Objectives

Mr. Speaker, macroeconomic policy under the new administration will be geared towards maintaining a stable macroeconomic environment conducive to investment, inclusive growth and employment creation.
Sir, the specific macroeconomic objectives in 2012 will be to:

a)achieve real Gross Domestic Product growth of above 7.0 percent;
b) attain end-year inflation of no more than 7.0 percent;
c)limit overall fiscal deficit to 4.3 percent of GDP and domestic borrowing to 1.3 percent of GDP; and
d)maintain gross international reserves of at least four months of import cover.

Monetary and Financial Sector Policies

Mr Speaker, monetary policy in 2012 will remain focused on the maintenance of single-digit inflation. In line with this objective, the Bank of Zambia will continue to use market-based instruments to limit money supply growth. The Central Bank will also continue to work towards enhancing the effectiveness of the monetary policy. In this regard, the option of adopting an interest rate-based framework will be explored further.
Sir, a flexible exchange rate regime has worked well forZambia by absorbing external shocks that could have been harmful to trade, employment and inflation. In this regard, the Government will ensure that determination of the exchange rate remains market based while supporting the competitiveness of our exports. To minimize the impact of rapid movements in the exchange rate, the Bank of Zambia will maintain its policy of intervention to smoothen volatility.
Mr. Speaker, maintaining a sound financial system is essential to investment and economic growth. To this effect, the Bank of Zambia will continue to promote stability of the financial sector through strong supervision of financial institutions and by ensuring compliance with regulations.

Fiscal Policy

Mr. Speaker, the objective of the Government in 2012 is to continue with effective fiscal management and supportive fiscal policies so as to attain high and inclusive economic growth. This fiscal stance entails increasing domestic and external resource mobilisation to support our development agenda and deliver on our commitment to “Make Zambia a better place for all.”
Sir, our fiscal policy objectives in 2012 will be to:

a)increase domestic revenues to 19 percent of GDP;
b)limit domestic borrowing to 1.3 percent of GDP and net external borrowing to 3.0 percent of GDP; and
c) commit at least 50 percent of the budget to social sectors and infrastructure development

Debt Policy

Mr. Speaker, the Government is aware that even as we spend more on socio-economic infrastructure, our ability to meet our debt obligations should not be ignored. In this regard, the Government will target concessional borrowing as the first option. In order to meet the huge infrastructure financing needs, the Government will also consider non-concessional borrowing for projects with high economic and social returns.
Sir, this Government will ensure transparent and accountable use of loans by strengthening parliamentary oversight. Further, the capacity to appraise projects in the Ministry of Finance and other ministries implementing major projects will be strengthened. The Government will also review the existing legal framework in order to strengthen debt management.
Mr. Speaker, early this year,Zambia was assigned a B+ rating by two reputable international rating agencies. This has opened up the opportunity forZambia to diversify its external financing sources to support our commitment to improve infrastructure, particularly in the road and energy sectors. To this end, the Government plans to proceed with the issuance of a ten-year sovereign bond worth US $500 million in 2012.
Sir, the issuance of this bond will establish a pricing benchmark for future bond issuance by both the private and public sectors. Furthermore, it will enhance the visibility of the country as a favourable destination for investment. This will “crowd-in” private sector investment and ease competition for domestic savings.

KEY STRATEGIES AND INTERVENTIONS

Mr. Speaker, the PF Government recognizes the efforts of previous administrations in establishing strong growth. However, indicators of human development inZambia are dismal, with poverty remaining consistently above 60 percent. In rural areas, the situation is even worse at 77.9 percent. Unemployment levels have remained unacceptably high especially among our youths. According to the 2011 Human Development Report,Zambia is still ranked among the poorest at 164th position out of 189 countries.
Sir, this tells us that we must never focus exclusively on macroeconomic stability. A mother in Gwembe is not interested in lower inflation if she can’t take her child to school; an unemployed youth in Kaputa is not empowered by songs of praise about stability of the exchange rate but by being provided with skills and job opportunities; our hard working farmers across the country have no interest in real GDP growth if their farm produce lies uncollected, they are not paid on time and they do not receive a reasonable and fair recompense for their labour.
Mr. Speaker, to address these concerns, the PF Government will focus on social justice and equity while sustaining macroeconomic stability. This will be achieved through diversifying the economy, enhancing productivity, promoting employment opportunities and pursuing sound financial management while investing in supportive infrastructure.
Sir, let me now provide brief details on each of these strategies.

Diversification and Productivity

Mr. Speaker, for far too long, our economy has continued to be over reliant on copper which has delivered limited benefits for the majority of our people. This Government recognises recent efforts made towards diversifying our economy. We are determined to accelerate these efforts by promoting growth in the agriculture, tourism and manufacturing sectors.
Sir, in the agricultural sector, we will extend support to crops beyond maize, strengthen research and extension services, invest in irrigation, develop and rehabilitate livestock infrastructure and promote disease free zones. In addition, the Government will reform the agricultural marketing system, promote agro-processing and forward linkages including through the development of farm blocks. Other strategies will include technological transfer and land development.
Sir, in the tourism sector, we will promote and expand tourism products and develop key infrastructure. The Government will also open up areas for private sector investment including the northern circuit. Further, with His Excellency’s bold decision to relocate the provincial capital to Choma, Livingstone will now be able to devote all its energies to enhancing its status as the tourist capital ofZambia.

Mr. Speaker, in the manufacturing sector, the Government will facilitate private sector development, promote the growth of Micro Small and Medium Enterprises and develop rural based enterprises. In this regard, the Government will continue with the development of the Multi-Facility Economic Zones.
Sir, to enhance private sector productivity, the Government has, within 50 days of taking office, lowered the cost of credit. The Bank of Zambia will continue to engage the financial sector to ensure that innovative ways of providing affordable financing are identified and implemented. In addition, the Government will accelerate business licensing and regulatory reforms to further reduce the cost of doing business inZambia. We will also invest in vocational and technical education in order to equip the labour force with the appropriate skills that meet the demand of the private sector.

Public Financial Management

Mr. Speaker, Government’s ability to effectively promote pro-poor growth through the budget is dependent on the efficacy of its public financial management (PFM) practices. Consultation, transparency and accountability are cardinal principles upon which this Administration will manage public finances. Adherence to these principles will reduce the space in which misuse and abuse of public resources can thrive, thereby enhancing the development orientation and service delivery impact of public expenditure.
Sir, to this effect, in 2012, the Government will finalize and begin to implement a revitalized PFM strategy that practically integrates these core principles into its PFM practices. Further, Government will bring to this House a Planning and Budgeting bill and an amendment to the Public Finance Act to place these cardinal PFM principles on a legal footing.

Public Private Partnership

Mr. Speaker, the Public Private Partnership (PPP) framework provides a mechanism to employ private financing and expertise for delivering public goods and social services that would ordinarily be funded from the budget. The PF Government will collaborate with and encourage the private sector to participate in financing key public sector projects for the benefit of our people. The experience from the already implemented PPP projects will be used to strengthen project identification, development and implementation. We will also ensure that the implementation of PPP projects does not give rise to unsustainable contingent liabilities. There is a compelling need to guard against fraudulent schemes.
Provision of Statistics
Mr. Speaker, effective formulation and evaluation of public policies depends on the availability of good quality and timely provision of statistics. In the past, inadequacies in the statistics have hampered well informed decision making. It has come to my attention that a number of organizations that are obliged to provide statistics have often not complied with the law.
Sir, we cannot allow this to continue and every organization operating in this country must avail Government with relevant information and statistics from time to time. Currently the Central Statistical Office is conducting an economic census. I implore the business community to cooperate with Government agencies collecting statistics as we all stand to benefit.

PART III
THE 2012 BUDGET

Mr. Speaker, I now present the budget for 2012 which focuses on promoting economic and social development through an appropriate balance between government expenditure, taxation and borrowing.

 

Mr. Speaker, the Government proposes to spend K27,698.3 billion or 26.5 percent of GDP projected at K104,462 billion in 2012. Of this amount, K19,976.0 billion or 72.1 percent will be financed from domestic revenues. K1,894.4 billion or 6.8 percent will be financed by grants from Co-operating Partners. The balance of K5,827.9 billion or 21.1 percent of total expenditure will be financed through domestic borrowing of K1,324.3 billion or 1.3 percent of GDP and gross external financing of K4,503.6 billion or 4.3 percent of GDP.
Sir, in line with the PF manifesto, the 2012 budget prioritises expenditures in the four core development areas of agriculture; education and skills development; health services; and local government and housing. In this regard, the budget allocations to these core programme areas have significantly been increased compared with the 2011 levels.  Mr. Speaker, let me now discuss policies and budget allocations.

Agriculture Development

Mr. Speaker, over the past three years, there has been an increase in agricultural output. However, the sector continues to face constraints such as low productivity, dependence on rain-fed agriculture, lack of appropriate and affordable breeding stock, low value addition, poor marketing and low investment. In addition, the competitiveness of the sector has been adversely affected by poor transport infrastructure, inadequate storage facilities and limited access to electricity. Further, Government policy has encouraged the growing of maize to the detriment of other crops.
Sir, these constraints mean that the benefits of improved agricultural output have often not reached the poorest rural households. As a result, the sector’s potential to significantly reduce poverty has not been tapped.
Mr. Speaker, in order to address these constraints, the Government will redesign the Farmer Input Support Programme, refocus market guarantees and differentiate extension service provision to support the production of crops which are appropriate to each agro-ecological zone.
Sir, alongside these reforms, action will be taken to improve crop productivity and production as well as soil and water management. The input provision and crop marketing systems will be streamlined and the sector’s competitiveness will be enhanced through infrastructure development and enhanced extension services.
Mr. Speaker, to the agriculture core programme, I have increased the allocation by 37.9 percent to K1,698.0 billion in 2012 from K1,231.6 billion in 2011. Of this amount, K500.0 billion is for the Farmer Input Support Programme and K300.0 billion for crop purchases for the strategic food reserve. The balance will cater for irrigation infrastructure, livestock development, fisheries and aquaculture development, and other programmes.

Education and Skills Development

Mr. Speaker, educating our children is an important prerequisite for long term growth and reducing inequality. Currently, there is minimal early childhood education, poor quality primary and secondary education, dilapidated infrastructure and limited access to vocational and tertiary education.
Sir, we must, therefore, strive towards the attainment of high quality, universally accessible and development oriented education for all. In particular, greater emphasis will be placed on early childhood education as it is a critical requirement for the social and intellectual growth of our children. This will lay a firm foundation for our children to develop into productive and innovative citizens.
In this regard Mr. Speaker, I propose to increase the sector’s allocation by 26.7 percent to K4,850.5 billion in 2012. Out of this amount, K796.4 billion has been set aside for various infrastructure projects including construction of more than 2,000 additional classroom blocks. I have also provided K126.0 billion to upgrade Chalimbana and Palabana colleges into universities and commence works on a new university at Lubwa Mission. In addition, the Government will undertake a net recruitment of 5,000 teachers and update the curriculum to improve the quality and relevance of education to bridge the nation’s skills gap.
Sir, in the area of skills development, the Government will scale up youth skill development programmes through the construction of nine, and rehabilitation of 12 Technical Training Institutes. This is aimed at empowering our youths and making them active participants in the development of the country

Health Services

Mr. Speaker, many families across the country today are struggling to care for their sick. For these families, the hours are long, the responsibilities daunting, the demands unrelenting and costs significant. When they visit their nearest health centre, clinic or referral hospital, their anguish is only minimally diminished, as they face a health provision system that struggles to provide adequate medicines, beds and other basic health requirements.
Sir, we cannot allow this situation to continue. Provision of more resources to the health care system will therefore be an important starting point. Today, I am making a commitment to the Zambian people that the budgetary allocation to the health sector will progressively increase in line with the Abuja Protocol.
Mr. Speaker, in 2012, I have increased the allocation to the health function by 45.0 percent toK2,579.9 billion. Of this amount, K301.7 billion will be for drugs and medical supplies. With these resources, we will scale up the provision of essential drugs, and procurement of equipment and other medical supplies especially to the under-serviced rural areas.
Sir, a provision of K77.9 billion has been made for the net recruitment of 2,500 front line medical personnel while K389.3 billion has been provided for infrastructure and medical equipment. Key programmes under infrastructure development will include the completion of 8 district hospitals and the construction of 5 new district hospitals including the requisite housing for medical personnel.
Mr. Speaker, health care provision cannot only be judged in terms of resource allocation, but also by improving access and health outcomes. In order to increase access to health services, the Government will remove all financial barriers to accessing health services by abolishing all user fees for primary care services not only in rural but also in urban areas.

Local Government and Housing Development

Mr. Speaker,Zambia’s communities, towns and cities are the places where our people live and work, raise their children, and want to retire in dignity and security. Each council is responsible for delivering services that are central to the everyday lives of our people. However, the functionality of the local governance system has been severely eroded thereby compromising local service delivery.
Sir, it is a priority of this Government to decentralize appropriate functions to councils over the medium term. The focus in 2012 will be to build capacity at local level in preparation for the phased devolution of functions from 2013. The Government will also restructure financial relations between the centre and the local level. This will ensure that these extra mandates devolved to the councils are adequately financed, in line with the principle of “finance follows function”.
Sir, in 2012, I have increased the grants to councils by more than 100 percent to K257.1 billion. This is to demonstrate the PF Government’s commitment to capacitate councils ahead of devolution.
Mr. Speaker, the provision of safe, potable drinking water and sanitation services in our communities requires our immediate attention. This will be addressed through the rehabilitation of more than 850, and construction of about 3,000 boreholes in rural areas. In urban areas, development and rehabilitation of water supply and sanitation infrastructure systems will be undertaken. In addition, the Government will facilitate the strengthening of the capacity of utility companies and other institutions in water and solid waste management.
In light of what has been outlined in the four core programme areas, the overall functional allocation of expenditures is as follows:

 

2012 Expenditure by Function

 

Function and Sub-Function

Allocation (K’ Billion)

% of Budget

General Public Services Executive

8,304.8

30.0

Executive

856.1

      o/w Grants to Local Authorities

257.1

              Constituency Development Fund

120.1

Legislation

594.7

General Government Services

7,400.5

       O/w Domestic Debt Interest

1,650.1

                External Debt

1,416.8

                Compensation and Awards

200.0

Centralised Administrative Services

362.5

Defence

1,648.5

6.0

Public Order and Safety

1,017.4

3.7

Economic Affairs8,120.0

29.3

General Economic, Commercial and labour

266.1

         o/w Empowerment Fund

40.0

Agriculture Forestry and Fishing

1,698.0

         o/w Farmer Input Support Programme

500.0

                 Strategic Food Reserve

300.0

                 Food Security Pack

25.0

Fuel and Energy

1,369.7

         O/w Kafue Gorge Lower Power Project

864.0

                 Rural Electrification Programme

437.1

Transport

4,658.8

         o/w Roads

4,481.0

Communications

39.0

Tourism

52.6

Environment Protection

31.8

0.1

Housing and Community Amenities

352.9

1.3

          o/w Water Supply and Sanitation

150.3

Health

2,579.9

9.3

          o/w Infrastructure Development

389.3

Recreation, Culture and Religion

136.9

0.5

Education

4,850.5

17.5

          o/w Infrastructure Development

796.4

Social Protection

655.6

2.4

           o/w Public Service Pension Fund

474.2

                   Social Cash Transfer

55.0

Grand Total

27,698.3

100.0

 

Mr. Speaker, the detailed expenditures for 2012, categorised by function are as follows:

General Public Services

Mr. Speaker, under the General Public Services function, the Government has made a provision of K8,304.8 billion or 29.9 percent of the budget. Out of this amount, I have allocatedK2, 091.9 billion to service domestic and external debt and K336.3 billion for payment of arrears to suppliers of goods and services. In addition, K257.1 billion has been provided for grants to local authorities, and K120.1 billion for the Constituency Development Fund.

Sir, other provisions include K200.0 billion for compensation and awards for payment of litigation cases ruled against the Government. A further K120.0 billion has been provided for contingency reserve meant to cater for unforeseen and unavoidable expenditures. The remainder of the resources will go towards regular Government operations.

Economic Affairs

Mr. Speaker, expenditure on the economic affairs function is projected to rise by 54.6 percent to K8,120.0 billion. Notable programmes include those in the agricultural sector, which I have already discussed, together with large investments in the energy and roads sectors. In the energy sector, I have allocated K864.0 billion as Government’s contribution to equity in the construction of the Kafue Gorge Lower power project while K437.1 billion is for the Rural Electrification Fund.
Sir, for the road sector, I have provided K4,481.0 billion, the bulk of which will go towards ongoing projects. Out of this amount, K101.0 billion has been allocated for feasibility studies and design for new projects including Leopards Hill to Chiawa, Kasempa-Kaoma, Kawambwa-Mporokoso and Luwingu-Kaputa roads. In addition, K60.0 billion has been provided for preparatory works on the Lusaka Ring-Road project. Other road projects that will be undertaken in 2012 include Mongu-Kalabo, Nyimba-Sinda, Nakonde-Mbala, Kalulushi-Lufwanyama, Kabompo-Chavuma, Bottom road and Mumbwa-Landless corner.
Mr. Speaker, with regard to the tourism sector, I have provided K21.1 billion for tourism marketing and promotion and K15.0 billion to recapitalize Zambia Wildlife Authority.
Sir, I have also provided K30.0 billion to facilitate the initial works of establishing the new provincial headquarters for Muchinga Province and the relocation of the provincial capital for Southern Province to Choma.

Public Order and Safety

Mr. Speaker, the Government intends to spend K1,017.4 billion or 3.7 percent of the budget on the Public Order and Safety function. Of this amount, K55.8 billion has been set aside for infrastructure development projects which include police housing units, police stations and forensic laboratories. In order to improve policing, K30.0 billion has been provided for the Zambia Police modernization programme and K16.7 billion for the net recruitment of 1,000 police officers. Further, an allocation of K50.0 billion has been made to continue with the programme of court construction and rehabilitation.

Housing and Community Amenities

Mr. Speaker, I have allocated K352.9 billion to this function. Of this amount, K150 billion has been provided as Government contribution to the water and sanitation sector, representing an increase of 26.1 percent from the 2011 provision. The funds will be used to improve access to clean and safe drinking water in rural and peri-urban areas.
Social Protection
Mr. Speaker, a total of K655.6 billion has been allocated for social protection programmes. Of this amount, K474.2 billion has been provided for grants to the Public Service Pension Fund. In addition, K90.0 billion has been provided for various social safety nets which include the Public Welfare Assistance Scheme, food security packs and social cash transfers.

REVENUE ESTIMATES AND MEASURE  REVENUE ESTIMATES

Mr. Speaker, in the economic objectives and policies that I have just outlined, it is very clear that the PF Government has a very ambitious plan to transform the Zambian economy. To do so, we need to carefully balance the demands of our citizens for lower taxes against the demands for higher spending, especially on poverty reducing programmes. This means that we must rebalance the burden of taxation, providing tax relief for those who have borne a disproportionate burden in the past while at the same time generate more resources from those areas of the economy that have benefited most from our strong macroeconomic performance.
Sir, under these circumstances, the Government expects to raise resources of K27,698.3 billion or 26.5 percent of GDP to support the 2012 Budget. Domestic revenues will constitute 19.1 percent of GDP while grant receipts from our cooperating partners will be 1.8 percent. The balance of 5.6 percent of GDP will be total borrowing out of which 1.3 percent of GDP will come from domestic borrowing and the balance of 4.3 percent of GDP will be external financing.
Mr. Speaker, the summary of the revenue estimates and financing to support the 2012 expenditures is as follows:

Resource Envelope for the 2012 Budget

 

 

(K’ billion)

Total Tax Revenues

19,267.7

Income Tax

10,271.5

10,271.5

Company Income Tax

3,264.4

PAYE

4,216.2

Withholding & other

909.5

Mineral Royalty

1,881.4

Value Added Tax

4,723.6

Domestic VAT

392.0

Import VAT

4,331.6

Customs and Excise

4,272.6

Customs duty

2,108.6

Excise duty

2,164.0

     o/w Fuel Levy

460.6

Non-Tax Revenues

708.3

Fees & Fines

465.0

Exceptional

216.2

Medical Levy

19.2

Dividends & On-lending

7.9

Domestic Borrowing

 

1,324.3

 

 

Total Domestic Revenue and Financing

21,300.3

 

 

Total Foreign Grants and Financing

6,398.0

Grants

1,894.4

 

General Budget Support

541.4

Sector Budget Support

219.2

Project Grants

1,133.7

Foreign Financing

4,503.6

 

Programme Loans

2,652.0

Project Loans

1,851.6

TOTAL REVENUE AND FINANCING

27,698.3

 

DIRECT TAXES

Mr. Speaker, during the run up to the election, the PF Government made a promise to the people ofZambia that it will streamline the tax system, lower tax rates and promote tax compliance. One of the commitments we made was to put more money in people’s pockets. I wish to assure this august House that we remain as committed to this cause as we were then.
Sir, as a first step to honour our commitments, I propose to double the exempt threshold for PAYE from the current K12 million to K24 million per annum. This translates into tax free income ofK2 million per month and will result in more than 80,000 low paid workers moving out of the taxable brackets. In addition, I have provided more relief by adjusting the tax brackets as follows:

Current PAYE System

 

Income Bands

Tax Rate

K1,000,000 and below per month

0 %

K1,000,001 – K1,735,000 per month

25 %

K1,735,001 – K4,200,000 per month

30 %

Above K4,200,000 per month

35 %

 

Proposed PAYE System

 

Income Bands

Tax Rate

K 2,000,000 and below per month

0 %

K2,000,001 –K2,800,000 per month

25 %

K2,800,001 – K5,700,000 per month

30 %

Above K5,700,000 per month

35 %

 

Sir, the PAYE restructuring increases disposable incomes of the workforce by about K1.0 trillion which can only be salutary for the economy.
Mr. Speaker, the Government believes that growth should be largely private sector driven. However, the cost of borrowing for investment has inhibited most of the private sector, particularly our local entrepreneurs, from engaging in gainful ventures. In order to compliment the efforts that we have already undertaken to reduce the cost of money, I propose to abolish the 40 percent upper corporate tax rate for banks. With this measure, banks will now be required to pay the standard corporate tax rate of 35 percent. This will help to make banks more liquid, a desirable objective to facilitate low cost borrowing by enterprises.
Sir, this measure will result in a revenue loss of K65.0 billion and I expect the banks to pass on the benefit of this measure to the borrowers by lowering lending rates further.
Mr. Speaker, agriculture is at the centre of our pro-poor development agenda. Sustaining the gains which have been registered in this sector over the recent years requires that we continue to increase capital formation and investment in this sector. I, therefore, propose to reduce the corporate income tax that is applicable to the agricultural sector from 15 to 10 percent. The proposed reduction is meant to increase investment and thereby raise productivity, output and incomes of our farmers. This measure will make available K10.6 billion for re-investment into the farming sector.
Mr. Speaker, in order to compensate for the revenue loss arising from the above measures, I propose to increase the mineral royalty rate to 6 percent from 3 percent and 5 percent for base and precious metals, respectively. I also propose to separate income arising from hedging activities from core mining activities for income tax purposes.
Sir, I expect to raise K981.0 billion from these two measures.
Mr. Speaker, in order to align the treatment of commission payments to non-residents with that of other income streams such as royalties, interest and management or consultancy fees, I propose that commission payments made to non-residents be deemed to have a  source in Zambia and therefore taxable at 15 percent. This measure will result in a revenue gain of K24.0 billion.
Sir, all the above measures will come into effect on 1st April, 2012.

VALUE ADDED TAX

Mr. Speaker, in 2009, the Government introduced a policy to include copper and cobalt ores and concentrates on the VAT deferment scheme. This was done to promote the utilization of excess smelting capacity following the decline in the country’s mineral production. However, with the increase in local production of copper and cobalt ores, it is no longer justifiable to retain these products on the scheme. I, therefore, propose to remove copper and cobalt ores and concentrates from the Import VAT Deferment Scheme. This measure will generate an extra K6.9 billion.
Sir, this VAT measure will come into effect on 1st January, 2012.

CUSTOMS AND EXCISE

Mr. Speaker, in 2006, Government introduced an export duty of 15 percent on the export of copper and cobalt concentrates in order to encourage local value addition and create employment. This policy is discriminatory as it does not apply to other minerals thereby creating   an uneven playing field. In the spirit of making this tax less burdensome and its application non-discriminatory, I propose to reduce export duty to 10 percent but also extend it to all unprocessed or semi-processed mineral ores. The revenue gain as a result of this measure is K70 billion.
Sir, in 2007, the Government removed customs duty on light passenger aircraft to promote tourism. I propose to extend this concession to cover helicopters and micro-lites. This measure will have a minimal revenue loss.
Mr. Speaker, I propose to increase the duty rebate threshold on travelers’ effects from US $500 to US $1,000. This will benefit travelers coming with accompanied personal effects from outside of the country. This measure will have a minimal revenue impact.
Sir, all the above Customs and Excise measures will take effect on 1st January, 2012.

HOUSEKEEPING MEASURES

Mr. Speaker, I propose to amend the income tax Act so as to harmonize the fiscal year and the charge year. In this regard, the Charge year for 2012 will run for nine months from 1st April to 31st December, 2012 so that the succeeding charge years from 2013 will run for a full twelve months from 1st January to 31st December
Sir, I also propose to amend the Customs and Excise, Income Tax and the Value Added Tax Acts to update and strengthen provisions and remove ambiguities in certain sections of these pieces of legislation.

INCENTIVES UNDER THE ZAMBIA DEVELOPMENT AGENCY ACT

Mr. Speaker, the process of granting additional incentives under Section 58 of the ZDA Act provides discretion and lacks transparency, thereby creating opportunities for corruption. I, therefore, propose to remove Section 58 in the ZDA Act in order to prevent leakages in the tax system and strengthen the quest for enhanced revenue mobilization.

PART IV
CONCLUSION

Mr. Speaker, the Patriotic Front won the 2011 Elections because it listened to the needs of the People at all levels. Now that we are in Government, we have not, and will never, distance ourselves from our people. His Excellency the President and his entire Cabinet have committed themselves to work tirelessly so that Government responds, in practical ways, to ensure that the economy is put on a path of rapid growth and that its benefits are widely shared by every Zambian.
Sir, we are not a Government that basks in the empty glory of statistical euphoria, but one that seeks a transformational shift in society to make it more just and equitable. In this regard Mr. Speaker, allow me to briefly summarize what this first budget of the PF Government means to ordinary Zambians.

 

Mr. Speaker, to the unemployed youth who feels this nation has little use for his energies, it means more opportunities for appropriate skills training and thus greater prospects for income-earning activities through which he can positively contribute to the development of his nation.
To the peasant farmer who only seeks to feed his family through his toil in the field, it means the provision of extension services and farm inputs that are tailored to the agricultural conditions of his area and to improved access to markets for his produce.
To the promising pupil who learns in a makeshift classroom with no desk and not a single text book, it means an improved learning environment which can better equip her for a bright and productive future.
To the grandmother who is looking after her deceased daughter’s sick orphan, it means free access to health care so she can buy the food they need.
To the enterprising businesswoman who lacks the funds to embark on her great ideas, it means access to cheaper capital that can be the catalyst to make her dream a reality.
To the hard pressed resident in a compound whose home and property is threatened with floods each rainy season and whose environment is strewn with refuse, it means the laying of the foundation for an empowered local council which can provide the basic local services he and his family deserve.
To the hardworking copper miner, the committed artisan and the industrious businessman, it means more money in their pockets from which they can raise their living standards and those of their families.
To civil servants, it means an environment where professionalism is reinvigorated and impropriety repudiated.
Mr. Speaker, to all taxpayers, the PF Government promises to manage public finances in a fully accountable and transparent manner so that all abuse of taxpayers’ money is identified and dealt with and all scope for corrupt practices eliminated.
Finally Mr. Speaker, allow me to enter a passionate plea to all Zambians to resolutely and unequivocally rally behind our President, the custodian of our interest, especially those of the disadvantaged segments of our great country, to put Zambia’s development on a sustainable trajectory.
Mr. Speaker, I beg to move.

[Read 253 times, 1 reads today]
Loading...

141 COMMENTS

  1. Will study in detail later. I am generally happy with the budget. I like it that we went the royalty way instead of the windfall way on mine tax. Royalty is reliable since you charge permanently unlike windfall which you only charge when copper is selling well. So for long term reasons, moving royalty tax on mines from 3% to 6% is best. K2 million and below is now tax free. No medical user feees… Generally a great START from the PF. But it is upto Zambians, not the PF, to implement this bold step.

    0

    0
  2. “Mr. Speaker, as I begin this budget address, I wish to acknowledge the macro-economic achievements that the country has attained when the economy was under the stewardship of my predecessor, Hon. Dr. Situmbeko Musokotwane, MP. I would like to pay tribute to him and the previous administrations for laying a strong foundation upon which this Government will build.”

    Can the King Cobra emulate his FinMin and praise his predecessor for having laid a good foundation on which is announcing COI day in day out knowing very well that money is there to pay to commissioners for doing nothing.

    0

    0
  3. ::d new goverment my foot. whats the difference???? we want more change and more money and more everything as promised….so make more adjustments to it??? think.

    0

    0
  4. The budget is inspiring and the allocations are well timed and if the resources are used according to the plan, I see a better Zambia ahead. It is very interesting to see how focused this government is and the manner in which they have prepared the national budget. I hope they will be committed to this budget and insure that the allocations are used specifically for the intended purposes. This budget can easily achieve the purpose so long there is seriousness on accountability which has been lacking in the previous government. The farmers must be smiling after reading the budget. It is also good to see the priorities such as Health, Education and Agriculture being given first priorities. This is in turn will help eradicate poverty amongst the people!

    0

    0
  5. I wish ba Sata had presented the budget…it was going be comedy…Ba Sata was be saying stuff like ‘natupakana..we shall buy yonse amataba from all the farmer unlike RB..the PF Govmnt is workin…

    0

    0
  6. I am equally happy with PAYE. I just hope there are no hidden details in this PAYE. If not then it implies more cash in our pockets for sure. I end here!

    0

    0
  7. I have no idea, what qualification this man has a minister, to be honest I would say I probably am, more educated than him

    He looks to have carefully researched his speech but these is a mediocre budget befitting of a man not quite with an aptitude deserving of being a minster

    Its laughable, I wonder what criteria are used in appointing these people to be certain ministers. This man, the defense minster and arguably the home affairs, appear lost and in wrong jobs.
    The country is sinking, Can you hear that…ssshhh you heard it? sssshhh    Yes ssshhh That was the sound of Zambia sinking!!

    Thanks

    0

    0
    • oh give us a break Mushota……..more educated.If you were so educated you would by know how these speeches are written so you not knowing just show your deep seated levels of illiteracy…

      0

      0
    • We are talking about National Isues not about how educated you are. Writing good english does not make you educated. You are educated but without a good job and lack business and political knowledge-YOU FOOL

      0

      0
  8. LT what is “Full budget address speech”? Its should read either “full budget address” or alternatively “full budget speech” .Your art of language is un-artful.

    0

    0
  9. .
    Drawing the budget is one thing and implementing the due process is a hurdle that must be tested to see the Performance Outcome. They are some lapses in the budget.
    Every Government knows how to draw a budget, but implementing it becomes a stumbling block.

    In meantime Sata’s advisors need to contain him by making sure he has a Firewall on his mouth, which must stop him from barking unnecessarily, which is depreciating the value of the kwacha on the global markets and scaring investors. Period !!

    Cont..

    0

    0
  10. .
    In the last 7 days, the Europe Zone has seen The Greek Prime Minister & Italian Prime Minister forced out of power by the “force” of Global Markets, thus the fact that both leaders had won “Votes Of Confidence” in the legislative and parliament houses.

    The mother of all evil in Global Capital Markets is (i) SPECULATION and
    (ii) UNCERTAINITY which can drive Sovereign & Global Markets Up or Down.

    And in the case, its so far scaring new investors to wanting to invest in Zambia or its Future Bonds – if Sata is not being careful with his mouth.

    0

    0
  11. .
    So far in the last seven day, in the 2 Post Editorials, Fred False Prophet Mmembe the staunch supporter of PF has categorically attacked Sata for starting on the wrong foot

    Signs of corruption have already been noted and Fred Mmembe does not like what is coming from State House as he put in Black & White his Editorials. As patriots of the land that we all love, we are watching!

    Government Contracts have already been awarded to inner circles based on family and friendship. Some of these chaps are already gloating all over these contracts.

    Cont.

    0

    0
  12. .
    Sata has been preparing himself and eager to lead Zambia for 11 years.

    Now that he is in power his PF Spokes person ( Wynter Kabimba ) has emphatically of recent said in the public while in the copperbelt preaching to his PF base that “Sata is still in SHOCK for having won the election and needs time”. What kind of “mediocre” is this coming from Kabimba?

    Time to “Bolt from the Blue” is over as this is now a reality that has to be executed by all mighty commitment.

    0

    0
  13. :d PAYE changes added to the reduction on lending rates by the banks is a good mixture to empower the ordinary zambian…so far so good

    0

    0
  14. Well, i am not happy happy with the budget because of the following reasons. Examine this:

    Proposed PAYE System

    Income Bands
    Tax Rate

    K 2,000,000 and below per month
    0 %

    K2,000,001 –K2,800,000 per month
    25 %

    K2,800,001 – K5,700,000 per month
    30 %

    Above K5,700,000 per month
    35 %

    How can you let people who earn up to K2,000,000 tax free? This is where majority of the workers are. Do this GVT know how much it has lost? How do you then finance schools, roads, health services etc? I can estimate the income loss to not less that K500 billion in a year, how many school are in this? We can not hope so much on corperate taxes because the price of metals may fall. A bird in your hand is better than…Salaries are not the only way to reduce poverty

    0

    0
    • You are thick mate really thick! l cant believe the nurses have let you play on the computer! Have you not read that mineral royalties have been doubled

      0

      0
    • Learn some basic economics. This is a budget of income and expenditure. There projected deficit is what will be financed by borrowing. The metric is about 1.3% of GDP. The acceptable extent is 3%.

      0

      0
  15. It really sounds good and focussed. It’s unfortunate for comment#1 to indicate that this is too long. You cannot afford to be that lazy on serious national matters, when infact this is the shortest I have ever seen! If the old man prepared and read this speech, how dare you the youth.
    I just hope the resources will be mobilised for the huge commitments. I ve not liked the income tax issue as there’s no much change for me – am always in the last band!
    But that aside, this is a budget for the people. Thumbs up p.f.

    0

    0
  16. Again why should a few individuals be made to pay such high tax? 35% why this is not fair at least you could have reduced the PAYE at top end to 30% i must now continue to wake up and pay so called poor people who in the most are just plain lazy!!!”!! i am disappointed it is like you are being punished for working hard and earning a good salary! so now i will just ask my employers to reduce my salary to 5.7 and give me the rest in benefits

    0

    0
    • if directors are going to pay themselves 56milion bucks per month at the expense of other employees, then let them be taxed!

      0

      0
    • Grace im suprised that you can say such things. You are one selfish individual who does not care about other people. You need to do something about your life otherwise you will remain ignorant. What you should know is that the higher you earn the more tax you pay. I earn more than you do but im in support of this govt, poor people need to enjoy life too.

      0

      0
  17. I am sceptical about how public infrastructure ( roads, dams, communication, e.t.c) will be financed. This PPP is not a proven concept and govt needs to fund such projects from its coffers, as well as borrow from IMF or the Chinese. There is no way private money can sustain such huge investments, looking at the payback times of these projects. The current blackouts are a sign that the past 20 years our politicians have been doing nothing for social development.

    0

    0
  18. # 13 INDEPENDENT OBSERVER – I am with you. The budget has been prepared but how much of this money will end up for the intended projects due to corruption, stealing and mismanagement. Some projects cannot work when the people being appointed to run them are very well known corrupt culprits including the Cobra himself.

    0

    0
  19. This is a pro-poor budget.Viva PF government. Implement this budget and achieve the objectives. Indeed change brings good things. But thieves of thefallen regime must not be let to go scotfree. They must tell us what was difficult about presenting this kind of budget.

    0

    0
  20. #21 Judas with you being overseas (i assume from flag) some of those nice roads,bridges and other public infrastructure you see are thru PPP due lack of sufficient funds in govts.The biggest operator of such PPP projects is an Australian company.Other PPP’s include the Channel Tunnel in UK which is proven. The funding of such things purely from GRZ coffers will only lead to massive debts like Greece,Italy & Ireland which have usustainable debts more 100% of their GDP’s.Our debt is ok at only about 30 percent of GDP which is where it should stay.

    0

    0
  21. @18 the Minister actually stated that there are about 80 000 tax payers who fall under the new tax free band. I however see a dont kubeba here in that salaries will be increased to above K 2 million so that a great majority will still pay tax. lets wait for 2012.

    0

    0
  22. Real issues for men.Banda and Musokwane did a splendid job.The pf have their job cut out.They left $2.6 billion!Very unprecedent in Zambia.Water from boreholes is a no.It will cost us.1/7 of Zambia is water.we need reservoir,purification and piping.The whole country can have clean water within a year.Irrigation must be top priority.They are hollow on this.I am persismtic but have a bit of hope in A.Chikwanda.On copper nothing much said when it is our livelihood.We should have looked at making copper products of which their are thousands to raise more income and create jobs.GOD BLESS ZAMBIA.

    0

    0
    • The previous government only left $1.8 Billion in reserves as opposed to your claims, infact it was late President Mwanawasa who left a $2 Billion money in reserve which was misapropriated by the immediate past government. My plea with this PF government is to immediatly probe the money stolen during late President Mwanawase’s funeral when France payed fr all the bills in Parismilitary hospital and transportaton of his remains to Lusaka.:)>-:

      0

      0
  23. Yaya,powerfull budget……ba #1 ubuwelewele ubwingi,who invited you to even read the budget….tulemimona ni cikonko mwikate alalila umwana..powerfull minister mwali kwi lyonse ili?????????

    0

    0
  24. @ 11, you must be very young, dull and has poverty of the mind or maybe a Grade 7 failure. I happen to have read Hon. Chikwanda’s profile in one international publication and was extremely impressed. Minister of finance in the early 80’s, Board Chairman of Barclays and Standard Bank in the 90’s, successful businessman, etc. His children some of them Di
    rectors at Lafarge, ZANACO etc. I read his articles in the Weekly Post then, very powerful and inspiring. Now Mushota what have you achieved, since you are still in the early 20’s am sure, what has your father achieved, am sure he can’t even make a budget for a home or run a kantemba.

    0

    0
  25. Good evening
    A lot to read and comment on this evening but with so little time on my hands, my attention was only restricted to our macroeconomic objectives.

    With the GDP projected to grow at 7.0 % and with the mines industry growing even faster, I think Zambia is still well-placed among Sub-saharan countries. Typically, global economic conditions do not leave African economies unscathed so I think we can need to do more if we are to break new ground and diverse from copper. In times of plenty, prepare for famine. 

    0

    0
  26. Mushota ( Number 11), if you are qualified get the job, if you are not, let the man do his job and you are better off keeping quiet and wait as we lead you. After all, if you were more qualified than him you would have been picked as the minster for finace.BTW, if you want to know his credentials, ask him, goggle, etc. Get a life B*&%H, if you want to be a critic, critise your boyfriends nuts!!!

    0

    0
  27. more money in our pockets. this is what we wanted. no jelous this is now a government at work. viva MCS

    0

    0
  28. Mushota ,you are as stupid as the person who brought you that laptop or chi desk top.Kanshi Niwe wakwatafye amano weka? I know you are a former plunderer and need to be caged.PAYE means more money in your pockets.Most workers will move from that category and eventually the majority will go to 25% threshold and will pay some tax.

    0

    0
  29. I need time to read the budget and compare it with the current year estimates. The presentation was ok except the echos from the MPs which has left too much room for me to wonder the calibre of certain MPs in the house even mimisters. Apo ABC ambile ule bwatabwata fye and passing foolish comments. I hope the Speaker will take time to watch the the video and follow the comment of that not honourable minister.

    0

    0
  30. #30, expect around K4, 940, 000, you are in the highest tax bracket (35%). Got a cool salary, man. The rest belongs to ceasar.

    0

    0
  31. Badjet is good for the people.
    Banks like Finance bank pay no tax at all though
    mahtani corrupts his way not paying any tax!!!!!
    Credit suise bought 40%shares in Finance bank for 80 million usd
    No tax was paid on this transaction.
    if this tax is collected then this budjet could be more generous to the poor people.
    WAKE UP ZRA AND BANK OF ZAMBIA!!!!!!!!!!!!!!!!

    0

    0
  32. 7,600,000.00 Tax

    2,000,000.00 200,000.00

    2,800,000.00 0.25 700,000.00
    2,800,000.00 0.3 840,000.00
    Total Tax 1,740,000.00

    Net 5,860,000.00

    0

    0
  33. Zambias future is in farming.Already ,demand for maize in neighouring countries is imense.there is lot of demand for food all over the world.Give farmers incentives.Duty free tractors ,farm implements,vehicles ,trucks etc…irrigation equipment etc all duty free

    0

    0
  34. it looks great but implementing it will be key to success!..education,farming,health are wewell taken care of.
    Mushota….with your vast brain please go invest pa zed…till then please a try to shut  up

    0

    0
  35. Did n `t have time to read it in full,only picked the aspect that caught my eye due to time constraint.Will read the rest later, My concern is,If your` are in the income bracket of K2, 000,001-K2, 800,000, per month, Are you not better off dropping and get a job that pays K2, 000,000 per month?  Why? Because if you`re getting between K2, 000, 0001 and K2, 600,000 then at 25% Tax rate, your take home pay is less than the person getting K2,000,001 and if you`re getting K2,800,000 you only get K100,000 above the K2,000,001 guy. Simple arithmetic. How fair is this?  What`s the incentive for being in the 2nd income bracket and if it took school, why would one take the trouble of going to college just to get a net pay that would be below or barely above a guy who has no college certificate?

    0

    0
    • the first k2m on every salary will be free. K2m is the threshold. l cant believe how thick people on this site are

      0

      0
  36. Not bad PF. Almost every sector has had an increase. Abolition of healthcare fees for both rural and urban users was long overdue. 2000 additional classroom blocks, upgrading of Chalimbana & Palabana colleges into universities and construction of 9 Technical Training institutes and rehabilitation of 12 more is good, but makes a mockery to UNZA, CBU, Ridgeway Campus, NRDC that are below standard and have not been addressed. Thumbs up most road rehabilitation projects initiated by MMD will continue. K21.1 billion just for tourism marketing and promotion is exaggerated I bet that means more of Fally Ipupa’s to promote our tourism? PAYE + mineral royalties is good, however no mention on natural disaster management, technological investments in Govt. or ZDA grants or initiatives.

    0

    0
  37. From my personal observation, this budget was prepared by the former government, though a few things were altered. The guys at the department of National planning were not touched. Next yerar we wiil see a real PF budget because at that time they will have seen what is obtaining on the ground proper. The other thing I would love to see is what the budget has for Zambian investors in diaspora. Unlike the chinese who will always externalise their profits , the Zambians will re invest the profits within Zambia, so it time the government approached this issue differently and not put a blanket policy on foreign investors.

    0

    0
  38. President Sata promised tarring of Vubwi Road during compaigns. He personally talked about this at His inauguration as well. However, where is Vubwi road in the Budget? Other roads have been mentioned, but where is Vubwi Road. People in this part of Zambia where at times passing through passable road of Malawi to get through to Sinde-Misale and Vubwi. Now relations are sour due to the differences of the two heads of state. Vubwi road is an emergency for people of Vubwi Constituency. Hon. Dr. Kazonga MP and Hon. Panji Kaunda MP remind the president please!!! Tarring of Vubwi Road!!!

    0

    0
    • there was too much biased E/P development from RB , so if Vubwi is in this province forget it, that was campgain. it is now kaputa-kasama via mporokoso road to be looked at, after all rb did the road to his farm!

      0

      0
  39. >DISAPPOINTMENTS 2011
    >I was disappointed that MPs do not know words in our national Anthem. They could be head still singing, “praise 2 D, Oh wa strong Humpfrey, Praise D, Praise D!”….shame 
    >I was also disappointed that most MPs were asleep during the Budget presentation. Full with… you can metion them…
    >I was disappointed that Dora was getting emotional, that could be seen from body Language, as PF MPs were shouting in support of the budget
    >I was disappointed that I did see G Kunda smile not even once as could other MMD MPs

    0

    0
  40. Please hit the metal when its still hot! Next year may be taken by other events-Vubwi road now! Otherwise, how will farm inputs reach the area and markets in Chipata?

    0

    0
  41. @ 41 got your concerns, but you are somehow wrong. If your income is K2,000,000 then take home is K2,000,000. If your income is K2,600,000 then take home is K2,450,000. If your income is K2,800,000 then take home is K2,600,000. Then who is better?

    @30, K5,860,000 is correct as tabulated by No. 36 and 37 however don’t forget the 5% which I feel is not serving any purpose and should have been reduced to about 2%.

    0

    0
  42. #49 The Gambino

    I think I also share the concern as DILDO.What he meant is: Lets say somebody is in the income bracket or band whatever is right of K2,000,001-K2,800,000 per month and that person happens to get K2,100,000.With 25% less pay,this person will take home K1,575,000.Certainly,a person earning between K1,600,000-K2,000,000 in the lower tax brand is better off than those between K2,000,001-K2,600,000.

    0

    0
    • Ba Sharp Shooter, I have always enjoyed ur postings but u r wrong on this one. A person with a Gross pay of K2,800,000 will only pay tax on K800,000 @ 25% (K200,000). His net will be K2,600,000.

      0

      0
  43. A good budget, I must say. A budget is an action plan that governments use to assess/ measure the effectivesss of their policies and strategies. As to more money in your pocket – I’m still not convinced as features of successive national bugdgets that impoverish the people have been left intact, not an iota touched – VAT, Customs, Excise and other indirect taxes and numerous levies. The wealth divide continues with the haves continuing to amass wealth, and the have nots in the village …

    0

    0
  44. What if a friend gets paid K 2 000 000, and I get K 2 400 000!! Who will carry home more, at the end of the month??

    0

    0
  45. Why are people so thick here, they cant even do a basic math. I cant stop pulling hair

    My father mr Chimfwembe gets K30m a month gross working out to be exactly K27.48m after tax now

    The band are written there why not use them?

    Why is this blog riddled with incompetent people, that can not even add a simple math question? and after this you ridicule my exceptional education? Shame on you

    Thanks

    0

    0
    • Mushota you have lost it. Actually the net will be something way less than that figure you have indicated. Below K24m. ACCA am doubting. Or you did not take Tax as an option in your final stage.

      0

      0
    • @Ka Mushota wena!! your “exceptional education” should hence control your head … don’t just swivel like a headless chicken… we need well schooled and directed debates here ..yours is a charade my sister!  listen and learn from this positive criticism!!

      0

      0
  46. Dear learned brothers and sisters can someone calculate my P.A.Y.E for my expected gross income of K 15,018,131.00?

    0

    0
  47. this budget is the first one of its kind to look into the plight of an indigenous Zambian like me in terms of more money in my food-basket.it is very unfortunate for #19 to make such unhealthy,unethical comments on the tax free food-basket money of K2m offered by the govt.he is complaining of funding for schools and hospitals which has already been catered for.

    0

    0
  48. For those with an accounts background, thanks for attempting to clarify to the masses. The article is deficient as it does not state that the 1st K, 2000,000 for every income bracket is tax free and that tax only kicks in on the extra monies. The article only states the gross pay Vis a vis the respective tax rates. The details some of you are giving understandably so are based on past experience especially for people conversant with Zed pay structure. However, going by the article above, your points of views may be mere speculations as there is no substantive evidence nor is it implied anywhere in the article(scientific). For clarity`s sake,enough details need to be availed as the devil is always in the details.Not everyone has done taxation. This is for the public consumption at large

    0

    0
    • DILDO…tell me. when someone says and writes “the first K2, 000, 000 – 0%” what does this mean? doesnt it mean that “the first K2, 000, 000 is indeed tax free”??? Read please Read & understand before you comment!!! We have been given enough details & there is no need for further explaination on this!

      0

      0
  49. As a private sector guy who has never worked in a government institution i find this format and content very unorderly. This thing is just a one year budget, it should have been simplified. There is so much unorderly rhetoric. For example, in Part 2 the Minister lists his government`s Key Strategies as; Diversification, Public Financial Management, Private Sector Partnership and closes the Chapter. Then Part 3 the minister makes another list of stuff as Agriculture development, education & skill development, Health services,Local government & housing development, Public order & safety (he does not clarify whether these are also strategies apearing in another chapter). At first glance, it looks like a 20th Century idea/ solution targeting a 21st Century problem. I`ll give further input.

    0

    0
  50. I read the full budget! A good start for the PF government. Zambia has had bright ideas as usual so I hope this one will be implemented, even 80% and we will see some positive scores here and there. Early child education is a good move as our kids deserve a solid foundation and a favourable environment where they will learn to appreciate school and upgrade themselves. We were educated the hard way and survived but not everyone is strong as we are, so there is need for the government to protect the citizens. Now, lets see the completion of the Mongu-Kalabo road this time around, its always been in the budget!

    0

    0
  51. for 15,018,131 zmk
    YOUR TOTAL PAYE = 3,991,345 ZMK YOUR MONEY = 15, 018, 131 – 3,991, 345 =11, 026,786ZMK – 5% NAPSA AND 5% PENSION SCHEME.

    0

    0
  52. This indeed is a good budget for Zambia. Let the ordinary zambian people enjoy free medical access, lower taxes, updated curriculum etc. VIVA SATA and PF.

    0

    0
  53. #67 Reflections Phiri Thanks for the computation of my P.A.Y.E..I wish i had the powers to appoint you as the Minister of Finance with IMMEDIATE EFFECT.Have a nice weekend

    0

    0
  54. @mushota..you sound like one of RBs prostitutes…cleaning vimbuzi ku Europe kulapenya…..get a real job instead of spending half your life blogging nonsense even on things you do not understand.

    0

    0
  55. PF you are number 1 with wisdom thanks for paye job well done i knew that i will never wst my vote to vote 4 mmd because i knew that pf can deliver keep it up Mr President & Mr Finance Minister.

    0

    0
  56. though some details on other taxes and levies are not mentioned. Generally the budget is good for Zambia. Most importantly is the reduction in base lending rates. This should attract a lot of borrowing by entrepreneurs from commercial banks and increase investment both in the private and public sector which with prudent management should results in more job creation and more more in peoples pockets.

    0

    0
  57. So the issue of more money within 90 days falls off.Next,putting more money in peoples pockets,which is for consumption,is a good decline plan for future.If more money is spent on income generating activities such as boosting the manufacturing base more wealth will be created and people will be able to consume and save.Next,People that are rich should have also been catered for in the budget they are the ones that work extra hard to make more money than the poor Lazoruos.Next,those that are excited with PAYE compare your income with the monthly bread basket then your net will make sence.

    0

    0
  58. K 3 600 000 I stand to be corrected will give PAYE : K 400.000 i.e
    K 2000 000 : 0%
    K 1 600 000 ; 0.25 = K 400 000

    0

    0
  59. While I personally appreciate the 2012 National Budget, I feel there is something that the Finance & National Planning Minister did not spell out with regard to PAYE and this is a very critical point particularly in the Mines. From my own understanding, the PAYE should only be calculated from one’ s basic rate/ month as per the figures shown in the National Budget and not from the Gross Salary which involves overtime and other allowances. The current PAYE method being applied to Miners where they are heavily taxed from the Gross Salary and not from the Basic Salary is very unjustifiable and thus, need to be addressed because if this method continues, then the dream about more money in your pockets shall never become true.

    0

    0
  60. Bushe Mushota te uyu waleyumfwa ati aleupwa kumusungu bushe chilishani ichupo? Seems to me like you do not even have time for your Scotish man … always on LT or ZWD yapping and bosting abakali tabalanda

    0

    0
  61. 1. The person grossing ZMK 7,600,000 will have a take home pay of ZMK 5,865,000
    the current being ZMK 5,486,750

    2. The one grossing ZMK 2,800000 will have a take home pay of ZMK 2,600,000
    the current being ZMK 2,296,750

    3. The one grossing ZMK 15,018,131 will net ZMK 10,686,785.15
    the current being ZMK 10,308,535.15

    0

    0
  62. If you have lived in Zambia since 1990s, you will appreciate the reason why MoF has been steady and doing well. While I give credit to the Ministers of Finance, my greatest appreciation go to the directors and officers who have remained unchanged since the Chiluba regime. They have seen us through the PRSP process as well as the reintroduced National Plans. People like Ngulube, Justin and many more who work behind the scenes, well done. You are the real heros and God bless you!!

    0

    0
  63. While the 2012 budget is inspiring i.e., it gives hope of better things, am apprehensive on how the various PAYE tax brackets will be applied. If it will go the way # 76 (Kegan Simbeye) has calculated, then am relieved; but if it goes the way # 54 has interpreted it, then the PAYE tax regime makes no sense at all. We may, in reality, be worse off! #65 (DILDO) is right on the ball when he says that the budget speech “does not state that the 1st K 2000,000 for every income bracket is tax free and that tax only kicks in on the extra monies”. This is the way it must be and I hope the powers that be will look at this issue critically in order to be fair to all income earners. If this is not done, those btn 2,000,001 & 5,700,000 will be greatly disadvantaged.

    0

    0
  64. My understanding is that the person getting K 2100 will pay K 25 000 PAYE as follows
    K 2000 000 = 0%
    K 100 x 0.25 = K 25 000
    Am not an accountant by profession .Can somebody conversant with payroll systems advise we need to know wether we have a fair deal or not.
    # 80(dablin 2007) kindly elaborate how you have arrived at the PAYE now that its different from Reflections Phiri(#68)

    0

    0
  65. #81 musonda, we also know that people working in that ministry, are also famous with what was dubbed Penzanomics at one time(nchekelako) ofcourse in every system there are a few remnants- clean ones, but as the saying goes “umusuku ubi, usushe mpanga”

    0

    0
  66. No. 19. Zambia has less than 20,000 people in formal employment. The revenue loss here is negligible my brother. Don’t be so narrow, try to look at the bigger picture

    0

    0
  67. Generally, the budget has some goodies to sing home about, given our economic disposition as a nation. Nevertheless, we await the gov to walk the talk and hope that there will be sustainability

    0

    0
  68. I had time to read thru it this morning and gave a D rating because the content and format are unorderly structured and lacks fundamental aspects that such a document should. This is PF`s first budget and yet nowhere does it outline the vision. I.e. What does PF intend to realize (sector by sector) in each of the 9 provinces in the next 5 years. Second, this document has no goals. What metrics is PF going to use to determine that the budget has delivered in aspects like, economic diversification, job creation, agriculture development, education & skills development, health service, local government & housing development, public order & safety?
    Third, Zambia ranks 121 on the higher education global index and no mention of how PF intends to restructure Unza, CBU and colleges.

    0

    0
  69. Continuation——-Third, Zambia ranks 121 out of 142 countries on the higher education global index and no mention of how PF intends to restructure Unza, CBU and colleges. The decsion to build 3 new universities when the order ones are in ruins is poor PF should allocate that to existing universities to improve the standards. Unza and CBU cant even make it in top 60 universities in Africa.

    0

    0
  70. my P.A.Y.E shall reduce by about K620,000=00 thus my net shall increase by that much.can i complain definetely not.i just pray that the cost of living to drop or stay at the same level.coz of late the prices of groceries are rising on a monthlt basis.

    0

    0
  71. Just give us the budget money divided by population , i just made that calculation i will pockect US$430.0, for a yr.

    0

    0
  72. “Making Zambia a better place for all.” Does that ring a bell? For those who have short memories, that was RB’s language. In claiming ownership of the budget, looks like PF forgot to change the title or theme. Not surprising at all, after all PF’s preoccupation when they were in opposition was to convince us that RB could not have initiated new projects but only continued where Levy had left off. Now we are convinced that it is impossible for PF to do a budget in one month, the first PF budget will therefore be in October 2012 for 2013, this one is RB’s.

    0

    0
  73. @ no 12 (Ka Mushota) whatever your name is!! – Stop embarrassing yourself …check your English B4 publishing.. at your deserved level I’m sure you don’t even understand the gist of these budgetary pronouncements! we need substance in debates on LT do you get me?  

    0

    0
  74. K 2,000,000 and below per month 0 %

    K2,000,001 –K2,800,000 per month25 %

    K2,800,001 – K5,700,000 per month

    30 %

    Above K5,700,000 per month

    35 %

    0

    0
  75. I am especially glad about the increase in the exempt bracket re paye – there are so many aunties, uncles, cousins etc that fall within that bracket. this will definately increase their spending power – although I wonder if this wont have any effect on inflation due to excess liquidity? perhaps my learned colleagues can assist as I am not an economist.

    0

    0
  76. I think the PAYE threshold is a Snakes-and-Radders kind of situation. Simple Maths tells
    me am better off at K 2m than more which would result in a deduction of 25pc pulling my
    net down to k 1.5m. This is an incremental cost. Consider revision!

    0

    0
  77. It is an overwhelming budget for Zambian 2012 National Budget.Lets support our Government in implementation of the same budget.PABWATO LETS GO.ONE ZAMBIA ONE PEOPLE.

    0

    0
  78. My brother suggested I may like this web site. He was once entirely right. This submit truly made my day. You can not imagine simply how so much time I had spent for this information! Thanks!

    0

    0
  79. I’m really impressed along with your writing talents as smartly as with the format to your weblog. Is that this a paid theme or did you customize it yourself? Anyway keep up the excellent quality writing, it’s uncommon to peer a nice weblog like this one nowadays..

    0

    0
  80. Thank you a lot for sharing this with all of us you really recognise what you are talking approximately! Bookmarked. Kindly also seek advice from my site =). We will have a link trade contract among us

    0

    0
  81. hey there and thank you for your info ? I’ve definitely picked up something new from right here. I did however experience some technical points the use of this website, since I skilled to reload the website many occasions previous to I could get it to load properly. I have been wondering if your web hosting is OK? Not that I’m complaining, but sluggish loading circumstances times will very frequently affect your placement in google and could damage your high-quality score if ads and marketing with Adwords. Well I am including this RSS to my e-mail and could look out for a lot more of your respective intriguing content. Make sure you update this again soon..

    0

    0
  82. I’ll right away grab your rss feed as I can’t to find your email subscription link or e-newsletter service. Do you’ve any? Please permit me recognise in order that I could subscribe. Thanks.

    0

    0
  83. Heya i’m for the primary time here. I came across this board and I find It truly useful & it helped me out a lot. I hope to offer one thing again and aid others like you aided me.

    0

    0
  84. Hi All. I ran across your web site the usage of msn. This is the very beautifully published content. I’ll probably be sure to book mark it and get back to learn extra of this valuable information. Thanks for the post. I’ll surely return.

    0

    0
  85. You understand therefore significantly relating to this subject, made me in my opinion imagine it from so many varied angles. Its like men and women aren’t interested unless it is something to accomplish with Girl gaga! Your personal stuffs outstanding. At all times handle it up!

    0

    0
  86. Thanks a bunch for sharing this with all folks you really realize what you’re speaking about! Bookmarked. Kindly also talk over with my website =). We will have a hyperlink trade arrangement among us

    0

    0
  87. flag Bug Out Bag l Fixed Blade Survival Knives l National Survival Center l Survival Book l Survival Food l Survival Gear l Survival Kits l Survival Knives l Survival Tents

    Thank you for the good writeup. It if truth be told was a entertainment account it. Glance advanced to more introduced agreeable from you! However, how can we be in contact?

    0

    0
  88. Heya i am for the primary time here. I came across this board and I find It truly helpful & it helped me out much. I am hoping to provide one thing again and aid others like you aided me.

    0

    0
  89. A person necessarily help to make seriously articles I would state. That is the very first time I frequented your website page and thus far? I amazed with the analysis you made to make this particular submit incredible. Magnificent activity!

    0

    0
  90. Attractive portion of content. I just stumbled upon your weblog and in accession capital to assert that I get actually enjoyed account your weblog posts. Anyway I will be subscribing in your augment and even I fulfillment you access persistently fast.

    0

    0
  91. A very good budget…very progressive and inspires national economic development… for the first time tourism has been given sufficient attention

    0

    0
  92. i think reality has hit the PF government now.they know now that 90 days is too short a time and one day at a time will get there.i think its a good budget.we can safly say its pro poor.NOW CAN WE IMPLEMENT ALREADY!

    0

    0
  93. Our London Escort girls have been selected for their friendliness, charm and warmth. Pure Pleasure caters for the discerning client who is seeking the most exclusive escort. You will find us to be one of the friendliest London Escort Agencies around. We have a great reputation here in London for both customer service and our fantastic companions.

    0

    0

Comments are closed.