Government is targeting to raise $3,85 billion in revenue in 2016, slightly lower than the $3,9 billion that was projected for this year, Treasury has announced.
In a pre-Budget strategy paper, Treasury said by December 31 this year, Government anticipates that it will miss its 2015 revenue target of $3,9 billion as it expects to raise $3,69 billion by year end.
Finance and Economic Development Minister Patrick Chinamasa is expected to present the 2016 National Budget tomor- row.
“The slowdown in economic activity is also being reflected through underperformance in revenues. Cumulative revenue collections for the period January to August 2015 amounted to $2,29 billion, against a target of $2,50 billion. For the rest of 2015, revenues are projected at $3,69 billion against the original budget $3,9 billion,” said Treasury in a pre-Budget announcement.
“Revenues in the medium term are projected to increase marginally in line with expansion of the revenue base. In 2016, total revenues are projected at $3,85 billion. Measures will be put in place to strengthen revenue collection, plug revenue leakages, strengthening revenue administration and rationalise the tax expenditure regime in order to meet the target.”
Treasury said during the first half of 2015, the Government faced rising expenditure pressures. Overall expenditure for the first seven months of 2015 amounted to $2,25 billion, militating against timely implementation of planned projects and programmes as well as payment of some overdue obligations.
“As we look into 2016, focus will be on managing expenditures in line with revenue developments. Specific key areas include the following – striking a balance between current expenditure demands and necessary development programmes financing including infrastructure and priority social spending,” it added.
The manufacturing sector was said to be on a recovery path and was projected to grow by 2,1 percent in 2016 owing to a number of measures put in place by the Government under the Zim-Asset programme. Treasury said in 2016, the Government will continue to monitor and evaluate the impact of trade measures that were put in place over the past three years, in support of the manufacturing sector.
These measures include the reduction and, in some instances, removal of duty on inputs into production and the upward review of import tariffs and licensing requirements on finished imports which can be easily produced locally.
It said electricity is a key factor of production in all sectors of the economy and hence the need to ensure incremental power generation in line with economic growth.
“The ongoing construction work on the Kariba South Extension together with the construction of Hwange 7 & 8 and other solar projects will be accelerated in order to further improve power supply. Furthermore, development of mini-hydro power stations on all major dams in the country will also be prioritised,” it added.