Secretary to the Treasury Fredson Yamba has disclosed that between January and May 2021 government’s total revenues and grants amounted to K40.1 billion, indicating an impressive 43 percent above the projection of K28.03 billion for the period of the total collection.
In a statement, Mr Yamba said that of the 40.1 Billion, K39.03 billion consisted of domestic revenues while resources amounting to K582.2 million came from Cooperating Partners.
He said the government also accessed financing worth K7 billion, and resources amounting K582.2 million from Cooperating Partners. Mr Yamba further announced that the government released a total of K49.7 billion for developmental programmes and public service delivery for the same period. He added that the release of funds to recipient Ministries, Provinces, and Agencies came against a backdrop of competing demands.
Mr Yamba noted that global economic downturn, triggered by the impact of the on-going Covid-19 pandemic, have been the biggest disrupters to the economy, livelihoods of citizens, and local production chains. He said despite the challenges, the Government is resolved to remain on course with the economic reform programme. He stated that the performance was driven by factors among them Tax Revenue Performance that amounted to K26.5 Billion in the period under review, representing a performance rate above target that was approved by Parliament for the 2021 Budget.
“This was mainly driven by positive performance of Income Tax, VAT, Customs and Excise duties, and Insurance Premium,” he said. “Of the K26.5 billion tax revenue collection, income tax was K15.1 billion, representing 36 percent above target performance,”.
“This was mainly driven by increased provisional declaration and payments made during the period under review by some mining companies,” Mr Yamba said.
He added that VAT collection was K7.6 billion, and was above target by 13 percent as a result of increased volumes and value of imports, mainly in the mining sector.
Mr Yamba stated that this is a good sign on the future of the sector, further saying that Customs and Excise Duty collections totaled K3.7 billion, representing an over-performed of 4 percent.
He explained that this was attributed to increase in importation of mining machinery and consumables such as spare parts.
“During the period under review, Insurance Premium was K72.9 million, representing a surplus of 30 percent. This was on account of strict compliance-enforcement activities,” he explained.
He said in the tax revenue category, export duties under performed by 61 percent due to reduced exports of taxable products. Through relevant structures, the Government will continue to observe the situation and to frequently monitor the impact of Covid-19 on the domestic economy.
“Appropriate fiscal and non-fiscal measures will be implemented as the situation dictates, to improve performance, further adding that non-Tax Revenue Performance Collections from non-tax revenue amounted to K13 billion. This represents an over performance of 132 percent.
“The good performance is attributed to the roll-out of electronic payment solutions under the Government Service Bus (GSB) Project, a dividend payment received from the Bank of Zambia, over collection by Ministries Provinces and Agencies (MPA’s), and good performance in road tolls (collected by the National Road Fund Agency) and Road Traffic and Safety Agency (RTSA) collections.
“In addition to the foregoing, mineral royalty collections recorded a surplus of 100 percent. This is on account of, among other factors; increasing copper prices and production levels,” he said.
He noted that over the period under review, the Treasury accessed financing worth K7 billion, mainly from the domestic market.
“During the period under review, the Government released a total of K49.7 billion to finance public service delivery, of the total expenditure, K45.6 billion was financed from domestic resources while K4.1 billion was foreign-financed.
“Social benefits releases under this category amounted to K1 billion, representing 2 percent of total expenditure, and 2.3 percent above the social benefits target,” he said.
“This is mainly attributed to the release of K217 million for the pension fund financing gap against a projection of K140
He further added that K786 million was released for the Social Cash Transfer Programme.