Govt misses tax revenue target

RUTENDO RORI

Government has missed its tax revenue collection target for the first quarter to March 31, 2021 by a 0.1% largely due to poor collections on excise duty and value added Tax (VAT), official Treasury data shows.

Tax revenue in the reviewed period stood at ZWL$86.46bn against a target of ZWL$86.52bn.

“VAT on domestic goods was lower than the set target due to the negative effect of Covid-19 lockdowns, and consumption was biased towards buying basic commodities, which are either exempt or zero rated. On excise duties, revenue collected from petroleum products declined as most companies had to close shop or maintain minimal operations due to Covid-19 induced lockdowns,” Treasury report reads.

However, tax revenue continues to account for the greater percentage of total revenues at 97.1% of total revenues, while non-tax revenue accounted for the remaining 2.9%.

However, total revenue was ZWL$89bn in the reviewed period against a target of $87.4bn.

Expenditures stood at ZWL$79.2bn, which was ZWL$ 2.9bn above the target.

Resultantly, a budget surplus of ZWL$9.8bn was realised during the quarter.

Major expenditures were on compensation of employees at ZWL$31.3bn and non-financial assets at ZWL$15.9bn.

Compensation of employees at 39.5% of total expenditures constitutes the largest share. Over-expenditures of ZWL$6.3bn is largely on account of hiring of additional personnel for critical posts in the education and health sectors.

The report reads: “Goods and services at ZWL$6.4bn constituted 9% of the first quarter expenditures. Of this amount, 24.5% went towards maintenance. Grants to extra budgetary units at ZWL$7.5bn constituted 10% of the total expenditures. These grants included salaries and operational expenses.

“Interest payments on debt amounted to ZWL$394.6m, constituting 1% of the total expenditures. The bulk of the interest payments was towards domestic debt at 62% while the remaining 38% went towards foreign debt.

Social benefits outlay during the period under review amounted to ZWL$8.1bn against a target of ZWL$3.2bn, resulting in a 156% over-expenditure. The resources went towards cushioning the general public especially from the effects of the deadly Covid-19.”

In support of social service delivery, a total ZWL$12.4bn was disbursed towards education, health, agriculture and social protection during the 1st Quarter of 2021.

Of the ZWL$12.4bn, ZWL$2.3bn went towards health, ZWL$7.9bn to agriculture while the remainder, ZWL$2.2bn went towards social protection and education.

Agriculture constituted the bulk of the social spending disbursement at 63.5% of the total disbursements. These disbursements went towards crop input support and irrigation rehabilitation and development.

Support to health was towards public health (communicable diseases and non-communicable diseases), curative services and bio-medical science, engineering and pharmaceutical production, to mention the major expenditure items.On education, a total of ZWL$706.2m was disbursed towards support of teaching and learning materials, schools feeding programme, sanitary ware and upgrading of schools and other facilities including per capita grants.

Expenditures on social protection programmes were on BEAM, harmonised social cash transfer, drought mitigation and sustainable livelihoods, among others.

Non-financial assets at ZWL$15.9bn (22%) constituted the second largest share of the 2021 first quarter expenditures. Most of the expenditures went towards furniture and equipment, capital grants to other general Government units, as well as construction of buildings and other structures.

The budget balance for the period January to March stood at ZWL$17.3bn, against a target of ZWL$10.1bn.

Related Articles

0 0 votes
Article Rating
Subscribe
Notify of
0 Comments
Inline Feedbacks
View all comments
Back to top button
Business Times
0
Would love your thoughts, please comment.x
()
x