BY FIDELITY MHLANGA
TREASURY has tabled an ambitious $14 billion revenue collection target by year 2019, despite only collecting a paltry 35% of that figure in the first half of the year.
Revenue collections for the first half stood at $4,99 billion, against a target of $4,15 billion, giving a positive variance of 20,2%.
But Treasury is implying revenue collection will treble in the last half of the year, notwithstanding the tough economic environment obtaining in the economy.
“Revenue collections to year end are projected at $14,1 billion, while expenditures are estimated to reach $18,6 billion, to give a modest deficit of 3,3 to 4% of gross domestic product (GDP) in line with the Staff-Monitored Programme and Transitional Stabilisation Programme (TSP) targets,” Treasury said.
According to the TSP, revenue was anticipated to grow to US$5,7 billion in 2019 and US$6,4 billion next year.
While the Finance ministry did not say how revenue generation would improve in the second half, in its 2020 pre-budget strategy paper, it said next year’s budget would focus on enhancing revenue collection through advancing the ongoing Zimbabwe Revenue Authority and other administrative reform initiatives on broadening the tax base and closing revenue leakages.
Treasury said prominence would be on improving taxpayer compliance through facilitative information communication technology-based processes that, among other measures, simplify tax payment procedures, minimise taxpayer costs and also enhance records management.
In a clear display that government is battling to finance its activities it has auctioned $640 million Treasury Bills in the past two months.
The Finance ministry projected GDP growth of 4,6% in 2020 from a negative of 6%.
Nominal GDP of $209,3 billion is expected in 2020, with revenues expected at $24,8 billion (11,8% of GDP), while expenditures are estimated at $28,5 billion (13,6% of GDP).
Of the total anticipated revenue, tax collections are expected to increase to $23 853 billion in 2020 from $13,3 billion in 2019.
Similarly, non-tax revenue is expected to surge to $948 million from $655 million.
In 2020, exports are projected at US$5,5 billion with imports growing to US$6,6 billion on account of higher imports of essential inputs and equipment, including electricity and fuel.
“Growth will be driven by export diversification and beneficiation of primary commodities to increase the value of exports, that way reducing risks from international price shocks,” Treasury said.
The 2020 Pre-Budget Strategy Paper is meant to facilitate discussions on policy direction for the 2020 National Budget, consistent with the objectives of the TSP and aspirations of Vision 2030.