Government has increased the Pay As you Earn (PAYE) tax threshold from K4, 500 to K4,800 in next year’s national budget.

This means that only employees getting paid K4,800 and above will be taxed Pay As You Earn.

Presenting the K167 billion proposed 2023 national budget in Parliament today, Minister of Finance and National Planning, Situmbeko Musokotwane said the move is meant to mitigate the cost of living for many Zambian citizens.

Dr. Musokotwane said the measure will add 21,509 more workers to those who do not currently pay this tax on account of being below the PAYE threshold.

“The measure will also increase disposable income for salaried households by K1 billion,” he disclosed.

The minister also proposed to increase tax credit for persons with disabilities to K600 per month from the current K500.

He further proposed the abolishment of the current two-tier taxation system in the telecommunication subsector, which provided for 30 percent tax on profit of up to K250,000 and 40 percent on profit above K250,000, and replace it with a single tax rate of 35 percent.

Meanwhile, the government has proposed an increase of the Constituency Development Fund (CDF) allocation for the 2023 budget to each constituency from K25.7 million to K28.3 million, which is an increment of K2.6 million.

Dr. Musokotwane said increased CDF allocation is an overall K4.4 billion, which is an increase of K401 million from the 2022 national budget.

He stated that this will address the challenges faced by communities especially in rural areas.

“Priority will be on improving water and sanitation at health and education facilities, procurement of school desks, electrification of schools and hospitals as well as provision of maternity services at health centres,” he explained.

Meanwhile, Dr. Musokotwane proposed to spend K66.2 billion or 39.5 percent of the budget on the General Public Services function.

He said of this amount, K30.5 billion will go towards domestic debt servicing while K18.2 billion is for external debt service.

“The allocation towards debt service does not take into account debt restructuring and will be subject to change once an agreement is reached with creditors. We appeal to our creditors to support us so that, together, we can expeditiously conclude the debt restructuring,” Dr. Musokotwane said.

And Dr. Musokotwane expressed worry that Zambia’s mineral production has stagnated in comparison to the Democratic Republic of Congo (DRC).

He said Zambia’s mineral production has for many years stagnated at around 800,000 metric tonnes while DRC is performing better.

He has therefore announced the restructuring of the mineral royalty regime as a measure for Zambia to regain its glory in the mining sector.

“The tax will now apply on the incremental value in each adjusted price band as opposed to the aggregate value when the price crosses the respective price threshold.

I further propose to reduce the lowest marginal rate to 4.0 percent from 5.5 percent. The revenue loss from this measure is estimated at K2.8 billion,” he said

A Financial Analyst and Economist, Trevor Hambayi, has said the Zambian economy needs to be growing at a minimum of 5.6 percent of Gross Domestic Product (GDP) in order to maintain its revenue generation and provide basic services whose population is growing at an average of 2.2 percent annually

 Mr. Hambayi, who is a Senior Partner at Development Finance Associates, observed that the Zambian economy has unfortunately been growing far below the minimum GDP growth in the past seven years.

The GDP growth trend has been lower than the required minimum from 2015 when the country recorded a 2.92 percent mainly due to a global crash in commodity prices, which largely was the reduction in copper prices in the case of Zambia. There was also a drought in the same period which caused electricity load shedding in the country.

In 2016, the GDP growth was 3.7 percent, 3.5 percent in 2017 and it rose to 4 percent in 2018.

“In 2019, our GDP was at 1.4 percent, in 2020, with Covid-19, we went into that recession of minus 3 percent and then we started to recover at 2.8 percent in 2021 and 3.6 percent in 2022,” he explained.

Mr. Hambayi said during the national budget analysis media workshop in Lusaka today that the minimum growth for Zambia to effectively deal with the poverty levels in the country is 16 percent growth.

The workshop, which also highlighted budget components which journalists should look out for in the 2023 national budget, was organised by the USAID-Zambia Revenue for Growth Project.

And Mr. Hambayi has disclosed that the domestic resource mobilization was an important factor towards managing national development in a sustainable manner.

He noted that currently, countries in sub-Saharan Africa are striving to achieve a recommended 22 to 23 percent domestic resource mobilisation of their GDP but are gravitating at between 17 and 19 percent.

He explained that Zambia was facing challenges in domestic resource mobilisation because of the citizens’ low savings rate, which are not sufficient to support government borrowing from the local resources.

“If the funds are not sufficient to support that borrowing, it means that we are actually spending the capital that we are supposed to invest into the economy and that will start to contract the economy,” he explained.

Mr. Hambayi further pointed out that Zambia’s dependence on foreign aid and Zambia Revenue Authority’s (ZRA) low capacity to collect revenue were other challenges that are limiting domestic resource mobilisation for the country.

He explained that ZRA’s institutional capacity to collect revenue was mainly hampered by the fact that a large component of the Zambian economy comprises an informal private sector.

“So it is not very easy to go and collect taxes from there even though the only tax that is missing from the informal sector is pay as you earn,” he said.

In Zambia, Pay As You Earn (PAYE) is the biggest component of the income stream that the government depends on hence the need to improve its capacity to tax the informal sector.

He added that economic stagnation has also limited the domestic resource mobilisation for the Zambian government.

“Having to deal with this economic stagnation will solve all our problems,” he said.

Mr. Hambayi has since cited increasing taxes, ensuring tax compliance, broadening the tax base and growing domestic capital through individuals’ savings as some of the options for scaling-up domestic resource mobilisation for the country.

He however observed that poor tax compliance in the country could emanate from low income among many Zambians and high taxes which the people need to pay.

“The tax base is very limited. We only have 900,000 formal jobs in this country, and then 1.2 million informal jobs, and another almost 2.9 million jobs in the agriculture sector,” he said, adding that the contracted GDP also limits the tax base.

Meanwhile, Chief of Party at the USAID Revenue for Growth Activity, Edward Koos, said government will need to significantly increase efficiency and compliance in tax collection.

Mr. Koos said government should also rebuild a culture that productively engages the private sector in formulating more equitable and broad-based tax policy initiatives.

“The Revenue for Growth Project aims to help Zambia improve domestic revenue mobilisation (DRM) and expand the fiscal space for investments in public service delivery and poverty reduction,” he said.

He further disclosed that the project will engage both government and non-governmental stakeholders to build capacity in tax policy analysis, improving tax compliance and administration and strengthening the tax culture in a manner that facilitates private sector growth and accountability relationships with taxpayers.

Mr. Koos revealed that activities under the Revenue for Growth Project will support four objectives namely improving tax and non-tax revenue administration and compliance, strengthening tax policy, enhancing public-private dialogue and enhancing capacity to address other fiscal policy and management priorities.

Tomorrow, September 30, 2022, Minister of Finance and National Planning, Situmbeko Musokotwane is expected to present the 2023 national budget in parliament.

Minister of Agriculture Mtolo Phiri has clarified that a voter’s card is not a requirement for one to qualify to benefit from the Farmer Input Support Programme.

And the Minister says a beneficiary farmer is not required to pay any other money apart from the K400 contribution for them to access farming inputs under FISP.

Delivering a Ministerial statement to parliament on the procurement of fertilizer this afternoon, Mr. Phiri said qualifications for one to be on the programme include being a member of a cooperative or farmer organization dully registered under the Ministry of Small and Medium Enterprises or the Registrar of Cooperatives.

Mr. Phiri said the beneficiary should be a registered farmer, should cultivate 5 hectares of land or less, should have the capacity to pay the K400 contribution to the government, and should be a Zambian carrying a Green NRC with an active phone number.

Meanwhile, Mr. Phiri said the government has saved over 153 million Dollars from the procurement of over 300, 000 metric tons of fertilizer for the 2022/2023 farming season.

Delivering a ministerial statement on the procurement of fertilizer this afternoon, Mr. Phiri said 153, 665.1 metric tonnes are Urea while 153,665.10 metric tonnes are D-compound fertilizer.

Meanwhile, the National Union Of Small Scale Farmers In Zambia-NUSFAZ- has disclosed that over 100,000 farmers have been left out of the government sponsored Farmer Input Support Program-FISP- for the upcoming 2022/2023 farming season.

NUSFAZ Executive Director Ebony Lolozhi says his union has since begun engaging the government through the ministry of agriculture, to see a way forward regarding the affected small scale farmers.

And Mr. Lolozhi has warned that failure by government to begin to adequately finance climate change interventions through the national budget and create capacity for farmer’s resilience against climate change as well as fund research and extension services, disasters will continue to threaten Zambia’s food security.

Meanwhile, Agriculture Minister Mtolo Phiri has disclosed that government has in an effort to avoid fertilizer supply companies from failing to deliver on their contracts, not awarded any company a tender to supply more than 100,000 metric tonnes of the commodity.

Mr. Phiri told Phoenix News that during the last farming season, some fertilizer suppliers failed to supply over 100 000 metric tonnes of fertilizer and that one of them still has a balance of about 17,000 metric tonnes of the input.

Non-governmental Gender Organisations Coordinating Council (NGOCC) Executive Director Anne Mbewe Anamela has said the 2023 National Budget should be gender sensitive.

Minister of Finance and National Planning, Dr. Situmbeko Musokotwane is expected to unveil the 2023 National Budget in Parliament on Friday, 30th September 2022.

Ms. Anamela said NGOCC expects the 2023 National Budget to be gender sensitive and responsive to address the unique needs of girls, boys, women and men if sustainable development is to be achieved.

She said there is need for the Government to ensure that the unique needs of women and men in the national budget are addressed.

Ms. Anamela said the women’s movement has already made tax and non-tax proposals to the Ministry of Finance during the budget formulation.

She said the Government should allocate adequate resources to the key sectors, thus, 20% to the Education sector; 15% to sector Health, 10% to the Agriculture sector and 5% to Social Protection.

“The Non-governmental Gender Organisations Coordinating Council (NGOCC) has called upon the New Dawn administration to ensure that the 2023 National Budget is gender sensitive and responsive to address the unique needs of girls, boys, women and men if sustainable development is to be achieved. Minister of Finance and National Planning, Dr. Situmbeko Musokotwane is expected to announce the 2023 National Budget in Parliament this Friday, 30th September 2022. As a reminder of the women’s movement tax and non-tax proposals made to the Ministry of Finance and National Planning in June this year, there is need for the Government to ensure that the unique needs of women and men in the national budget are adressed. More specifically, Government should allocate adequate resources to the key sectors, thus, 20% to the Education sector; 15% to sector Health, 10% to the Agriculture sector and 5% to Social Protection in line with the different regional and international treaties,” Ms. Anamela said.

She added that most vulnerable women, and children, depend on social sector delivery by the Government hence the need to prioritize the social protection sector.

“The Government should for example, fulfil its commitment under the Abuja Declaration by allocating the said 15% of the national budget to the health sector. The most vulnerable in our society, women, and children, depend on social sector delivery by the Government. It is therefore imperative that the allocation and disbursements to these social sectorsbe prioritized. We further expect that Maternal and child health should be prioritised within the health sector.NGOCC also calls on the new dawn government to broaden the tax base in the 2023 National Budget in order to boost domestic revenue collection. This should include introducing equitable tax measures in the informal sector. It is our hope that Government will zero rate consumption tax (VAT) on essential food items to ensure poor female headed households meet their basic needs.

She said the NGOCC wants the Government to increase the current tax-free threshold from the current K4,500 to Z5,000 as food and the general cost of living have increased.

“Further, Government should increase the current tax-free threshold from ZMW 4,500 to ZMW5,000 as food and the general cost of living have increased. Government must allocate sufficient resources to the full implementation of the Anti-Gender Based Violence (GBV) Act, especially targeting the review of the Act; training of Law Enforcement and Judicial Officers, establishment of the Anti-GBV Fund, construction of shelters countrywide and the establishment of Fast Track courts in all provincial centers to handle GBV cases. It is also our hope that the Government will prioritise the operationalisation of the Gender Equity and Equality Act (GEEA) to establish the Gender Commission,” Ms. Anamela said.

“It is also our expectation that the Government will make provision for the Constitutional review process to ensure that the lacunas in the 2016 Amended Constitution are addressed. As we have stated before, for the women’s movement the inclusion of the expanded Bill of Rights remains a priority. It is our hope that the Government will also make provisions for the holding of a stand-alone National Referendum to ensure that the expanded Bill of Rights is included in the Constitution,” she concluded.

Stakeholders are giving out their expectations ahead of the 2023 National Budget presentation to Parliament set for this Friday, 30th September, 2022.

The Government has been urged to allocate more funding to Agriculture Research Centres in the 2023 national budget.

Zambians United for Sustainable Development (ZUSD) President Lazarus Chisela said the budget for 2022 did not address challenges facing the agriculture sector especially research centres.

Meanwhile, Ndola District Chamber of Commerce and Industry (NDCCI) President Paul Chisunka said the National Budget should balance supply-side economics with demand-side economics