GOVERNMENT has revised its initial 2018 revenue projections by 12% to $5,7 billion on the back of the 2% tax on mobile and electronic transfers introduced earlier this month, which is expected to increase revenue to $6,4 billion in 2019.
Source: Govt revises revenue projections – NewsDay Zimbabwe October 30, 2018
BY TATIRA ZWINOIRA
Presenting to the Parliamentary Portfolio Committee on Budget, Finance and Economic Development the bids and priorities for the 2019 National Budget yesterday in Harare, Finance secretary George Guvamatanga said the budget would widen the tax base.
“It is imprudent to note Mr chairman (MP Francis Mhona, who chairs the Finance Portfolio Committee) that our projected estimate for 2018 revenue was just over $5 billion, or to be precise, $5,071 billion. We now have a 2018 projected outturn of revenues of around $5,7 billion. Projections for 2019 indicate total revenue and grants of $6,4 billion, which is anchored on tax revenue of $5,5 billion, which is up from the projected outturn of the 2018 tax revenue of just over $5 billion,” he said.
“It is also important to note that the additional $700 million that I have indicated earlier on as the final projected outturn of total revenue and grants is actually emanating from this increase in tax collection. The budgeted figure or estimate for 2018 was $4,3 billion. So, I think these numbers, Mr chairman, show that this economy is actually performing. You would not be able to increase your revenue in a non-performing economy.”
The 2% tax, on any mobile or electronic transfer of cash between $10 and $500 000, is expected to add around $700 million to government revenue.
Guvamatanga said the preliminary budget framework development for 2018 and the projection for the period 2019 to 2021 showed an improvement of both revenue collection from tax and a gradual reduction of the budget deficit as a percentage of gross domestic product. He added that this was also expected to improve the employment cost as a total of expenditure of the returned funds. However, the 2% tax on electronic transfers has largely been unpopular among the tax-paying populace.
“The medium term budget framework for 2019 to 2021 as outlined in the budget strategy paper is premised on fiscal consolidation as a policy thrust and centred on disciplined and dependable implementation of fiscal reform measures that reign in unsustainable recurrent expenditure, enhance revenue generation and stick to a strict adherence to fiscal anchors,” Guvamatanga said.
“The over-arching framework for the 2019 budget will comprise the following; expand the tax base through the introduction and retention of tax policy instruments in support of the productive sectors to ease the burden of collecting and paying taxes, (including) reducing consumptive expenditure demands to sustainable levels in order to create the basis for improved public service delivery as well as increases in public funding.”