Tax relief measures and involuntary scaling down productive activities across all economic sectors have translated into a reduction in tax and non-tax revenues in the first half of the year.
In a press release to the media, Ministry of Finance Treasury Secretary, Fredson Yamba, said the total revenue collections and grants amounted to K32.2 Billion during the first half of 2020, 5.1% below the K34 Billion projection.
He noted that the tax and non-tax revenue amounted to K24 Billion and K7.5 Billion respectively, and project grants K729.6 Million for January to June 2020.
Mr. Yamba said that the overall budget performance remained relatively fair despite fiscal challenges.
He added that unplanned adjustments due to COVID-19 had severely impacted the country’s fiscal health.
He further stated that the total personal payments expenditure between January and June 2020 was 1.1% above projection, with adverse movements in the exchange rates contributing to higher than the anticipated Kwacha equivalencies from the Dollar payments.
The depreciation of the Kwacha against major trading currencies, led to an increase in inflation,Mr. Yamba said.
This has also led to higher than programmed disbursements for allowances for staff in Zambia’s missions abroad.
Mr. Yamba stated that the total sum of K46.8 Billion, was released for expenditure, 7% below the projection for January to June due to lower than projected disbursements for the foreign financed component.
He said personal emoluments accounted for 26.7% of total expenditure during the period under review, of which K12.5 Billion was released to cater for salaries, third-party payments and overseas allowances for staff representing Zambia abroad.
Mr. Yamba stated that Value Added Tax (VAT) collection amounted to K6.06 Billion against a target of K9.11 Billion which was below target by 33.5%.
…this was on account of the closure of trade ports and general activity slowdown at national boarders due to COVID-19 related factors,he said.
He further added that K14.3 Billion was released for debt service with payments totaling K8 Billion, which included K1.9 Billion principle repayments on government securities.
Mr. Yamba assured the public that the Ministry of Finance would continue to review the economic sustainability initiatives that were in place, so that the negative impact of COVID-19 on the economy is moderated.