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2021 budget unrealistic – ActionAid Zambia

ActionAid Zambia says the 2021 is not realistic and lacks bold measures to stimulate economic recovery and build resilience to safeguard livelihoods.
Organization Country Director Nalucha Ziba told Money FM News that despite a number of stakeholders calling for bold tax revenue measures such as cancellation of unbalanced tax agreements that facilitate tax avoidance and lead to loss of revenue, the budget has no comprehensive revenue compensating measures.
Ms. Ziba noted that the national budget tax revenue projection is unrealistic in the wake of COVID-19 because it has no rigorous progressive fiscal reform to enhance domestic revenue mobilization.
She said the organization does not see how government is likely to maintain the tax revenue in 2021 less 1 percent of what was projected in the 2020 national budget when it has already projected a reduction in the same.
“To begin with, some of the macroeconomic objectives are not realistic, for instance, there is a target pertaining to achieving domestic revenue collections of not less than 18.0 percent of GDP, however the budget has no comprehensive revenue compensating measures. In this regard, many stakeholders have called for bold tax revenue measures such as cancellation of unbalanced tax agreements that facilitate tax avoidance and lead to loss of revenue.”
“In the same vein, it seems there is proposal to remove discount on some fees as a way of raising revenues. For instance, removing discounts on fees paid for online company registration and filling of returns. However, with the current economic hardships which has affected companies’ little revenues will be raised,” Ms. Ziba said.
And Ms. Ziba observed that the Health sector budget share remains below the 15 percent Abuja declaration commitment as it has decreased from 8.84 percent in the 2020 national budget to 8.07 percent in next year’s financial plan.
She said the development is questionable and shocking considering that defense, public order management and roads have continued to receive significant share of the national budget.
“The Health Sector budget share has continued to decrease since 2018. This is disappointing in the wake of COVID-19 battle, which seems far from over. Likewise, the education sector budget share has not only continued to remain below the recommended 20 percent but has also been decreasing since 2014.”
“In the 2021 national budget the sector’s budget share has decreased to 11.5 percent from 12.38 percent in 2020. The development is shocking and questionable especially that defense, public order management and roads have continued to receive significant share of the national budget. Therefore, ActionAid wishes to implore parliament to solicit for upward adjustment of budget allocation towards the health and education sectors,” she stated.

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