Finance minister Tendai Biti yesterday warned Zimbabwe to brace for the “gnashing of teeth and tightening of belts” as the Mid-Term Budget Review he will present on July 26 is not going to be rosy.
Biti ruled out the possibility of presenting a supplementary budget as there was no capacity or scope to increase revenue.
He said the country was failing to meet its revenue collection target.
“Unfortunately, there is no capacity at the present moment to actually increase our revenue as the 2011 budget of $2,7 billion was money that was supposed to be accumulated up to December 2011. The country was supposed to amass revenue of up to $230 million in March, but failed to do so,” said Biti.
“There were only two months that we achieved the $230 million margin and these were March and June, where we received quarterly payments for corporate taxes, otherwise in the first six months of the year, we were $100 million below acceptable revenue.”
He said he already projected a fiscal deficit of $500 million due to the increase of civil servants’ salaries in January and financing the purchase of grain through the Grain Marketing Board where they have to obtain 500 000 tonnes of grain.
“We have other challenges like Copac and have spent over $30 million in foreign trips in the first quarter of the year,” said Biti.