The Zambia Revenue Authority – ZRA has yet again reported that it has exceeded the mid year revenue collection target by K2.1 billion (about $130 million) but analysts and local business people have expressed concern on whether these collected revenues are being spent in Zambia or are mostly being drained out of the economy through foreign payments.
A random survey by the Zambian Business Times – ZBT reveals that most local businesses, traders and those plying their trade in the informal sector are still experiencing low demand for their goods and services with complaints of “no money” in circulation coming up as a daily challenge.
According to a statement made available to ZBT by ZRA, the tax revenue agency has recorded an above-target revenue performance in the first half of the year 2022 after collecting a net tax outturn of K48 billion against the period target of K46 billion, thereby registering a surplus of K2.1 billion or 5% above target.
Some have alleged that ZRA has become aggressive with local tax collections from local businesses which are already strained due to the liquidity. The Association of Microfinance institutions in Zambia – AMIZ disclosing to ZBT that most loans are being taken for consumption and not investments.
The new dawn UPND appointed Finance Minister Situmbeko Musokotwane has been criticized for allowing the deductibility of mineral royalty for corporate income tax assessment purposes for mining companies in Zambia which has resulted in revenue loss of about K3.2 billion ( about $200 million) per annum.
Musokotwane also announced that the new dawn administration has set a target of Zambia producing 3 million tons of copper per annum in the next 10 years (which coincides with two terms of office in government for the UPND).
However, this target of producing 3 million tons of copper per annum has been said to be unrealistic by established mining engineers and mineral exploration experts. The finance minister is yet to share a detailed plan with milestones on how this target would be attained.
The Ministry of Finance and its local government counterpart have been confirming that funds are being remitted into Constituency Development Fund – CDF accounts but a check at Ward and Constituency geographical levels even among ruling UPND connected firms shows that he issue of liquidity and “no money in circulation” keeps popping up.
