Govt exceeds June revenue target

Africa Moyo Deputy News Editor
Government surpassed revenue targets for June after collecting over $1,3 billion against a target of $903,5 million, mainly due to taxes on income and the 2 percent tax on electronic transactions.

This saw the Budget achieving a fiscal surplus of $159,8 million against a target of $90 million, in line with Government efforts to consolidate its expenditure.

The statistics are contained in the consolidated statement of financial performance of the Consolidated Revenue Fund for the period ended June 30, 2019.

“Total revenue collection for the month of June 2019 amounted to $1,310 billion against a target of $903,5 million resulting in a positive variance of $407,3 million (45 percent),” reads the statement.

The positive performance was mainly recorded under the taxes on income, which contributed $424,9 million against a budget of $304,5 million; intermediated money transfer tax, commonly known as the 2 percent tax, contributed $163,6 million against a budget of $95 million, while tax on goods and services generated $625,3 million against a budget of $436,6 million.

In the period under review, airtime levy contributed $15,8 million against a budget of $12,9 million.

The levy is ring-fenced for medical equipment and drugs.

Government said the utilisation of the levy was recently enhanced by “the market preparedness to supply drugs for RTGS dollars”.

Non-tax revenue also recorded a positive variance of 42 percent mainly due to the fact that Government fees and charges have not increased in line with inflation developments, thereby inducing more demand.

In June, employment costs rose to $377,4 million against a target $328,7 million resulting in a variance of $48,6 million (15 percent).

The jump in expenditure was largely driven by the Cost of Living Adjustment (COLA)awarded to all civil servants, including grant aided, with effect from April 1, 2019, as well as a review of pension benefits.

Expenditure of goods and services was $216,7 million against a target of $66,9 million, resulting in a negative variance of $149,8 million, mainly due to the general price rises.

Capital expenditures for June amounted to $344,1 million against a target of $347,3 million, giving a positive variance of $3,2 million.

Economist Mr Persistence Gwanyanya applauded the financial performance but said as the country celebrates the fiscal consolidation efforts, it should note “lose focus of what we are trying to achieve”.

“I should always remind the nation that the current fiscal consolidation efforts are intended to stabilise the local currency as well as general prices.

“Fiscal consolidation that doesn’t achieve these goals is questionable,” he said.

Mr Gwanyanya said it was important to ensure that surpluses were directed to supporting utilities mainly electricity and water, so as to support the exchange rate and guarantee price stability.

Zimbabwe is contending with serious electricity challenges due to low water levels in Kariba Dam, and the obsolete generating machinery at thermal power stations.