Source: Government revenue decline | The Financial Gazette July 12, 2016
GOVERNMENT fiscal outturn indicates that cumulative revenue for the first quarter of 2016 stood at US$808,36 million, against total expenditure of US$968,17 million, the Reserve Bank of Zimbabwe has said.
This resulted to a deficit of about US$159,8 million, which was partially financed through domestic borrowing.
“Government revenue fell short of the targeted levels of US$920,69 million by about 12 percent, while expenditure exceeded budgeted levels by 6,3 percent, during the period under review,” said RBZ in its first quarter report.
Government’s failure to meet targets spells disaster in paying civil servants and meeting its service delivery obligations. Top priority for government at the moment is to lower the wage bill, which currently gobbles about 80 percent of revenues, while leaving meagre sums for capital expenditure.
“In terms of revenue heads, tax revenue collected during the first quarter of 2016 fell below target, due to revenue underperformance associated with subdued economic activities. Tax revenues, at US$ 726 million, contributed about 90 percent to total revenues, while non-tax revenues accounted for the balance,” said RBZ.
The failure to meet revenue targets has warranted serious reflection on the state of the economy by both government and citizens.
More than 80 companies have closed in the first quarter of 2016, while over 2 000 companies are said to have shut down over the past three years. This has resulted in the loss of corporate and individual tax revenues, as well as a reduction in people’s buying power.