Ministry of Finance and National Planning K167.3 billion 2023 Budget Symposium Monday, 3rd October, 2022
Salim Kaunda, USAID/Zambia Economic Governance Specialist
Ministry of Finance and National Planning Budget Symposium Monday, 3rd October, 2022
(remarks as prepared)
Mulungushi International Conference Center (MICC) Kenneth Kaunda New Wing (KKNW)
Good morning. I bring you greetings on behalf of the United States Ambassador to Zambia, Mr. Michael Gonzales, and the USAID/Zambia Mission Director, Mr. Wiebler. My names are Salim Kaunda and I oversee the USAID Revenue for Growth Project, co-sponsor of this budget symposium. I am deeply honored to deliver these brief remarks on behalf of the United States Embassy and USAID.
Since the project began, USAID Revenue for Growth has received excellent support and cooperation from our counterparts at the Ministry of Finance and National Planning and the Zambia Revenue Authority, as collectively, we all agree and understand that increased domestic revenue mobilization is key for sustained economic growth and increased funding for much needed social services Zambian citizens expect from their government.
USAID would like to take this opportunity to recognize the very capable and dedicated staff within the Ministry and the ZRA who we have had the pleasure to work with over the past year. We are also encouraged by the commitment shown by the Government of the Republic of Zambia to strengthen the equity and efficiency of domestic revenue mobilization, inline with its Medium Term Budget Framework and its Revenue Action Plan.
We would like to commend the Minister on the 2023 Budget submission. From our work with our Government counterparts we have some understanding of the time and effort it takes to formulate and draft the Budget.
A $12.8 million, 5-year project, USAID Revenue for Growth was awarded in June 2021 and designed to support the Government of the Republic of Zambia in its efforts to increase domestic revenues. The Revenue for Growth project focuses on tax policy reform, tax administration, and enhancing public private dialogue between the Zambian government, private sector, civil society organizations, academia and the media.
We work closely with other cooperating partners, who are also committed to supporting the Zambian government deliver on its objectives. In the domestic revenue mobilization area, we particularly value our collaboration with the EU and Germany, through GIZ, who are also important partners of the GRZ.
I am pleased to take a few moments to share a handful of the initiatives USAID, through Revenue for Growth, is conducting to support provisions included in the 2023 National Budget.
USAID has and will continue to support initiatives to help achieve the collection targets of domestic revenues of approximately K112 billion.
With our GRZ partners, we conducted an Excise Tax Gap Study to quantify the tax gap, and identify potential changes for the MOFNP to consider. We are pleased to see that two of the proposals from the study were included in the Budget.
Honorable Minister, I want to mention that we will conduct extensive tax gap studies of the Corporate Income Tax, Personal Income Tax, and Withholding Tax during the coming year, with a view towards quantifying the tax gaps and proposing policies and procedures to close identified gaps.
USAID has been working with both the Ministry and ZRA to examine the dynamics of the gaming and betting industry in Zambia, challenges faced by the industry, optimal ways of taxing the industry, and the social impacts. We will continue to support the Ministry in developing appropriate policies, strengthening regulation, and enhancing revenue collection of the gaming and betting industry.
Under debt management, USAID Revenue for Growth reviewed and optimised ZRA’s debt management process (and operating model), including its alignment to global best practice. This resulted in, among other things, the improved overall effectiveness and efficiency of the tax collection process.
I am pleased to inform you that over the past two weeks Revenue for Growth has supported the ZRA in an initiative that resulted in the collection of 8.7 million kwacha in unpaid taxes.
Finally, USAID Revenue for Growth project is also committed to supporting the Government’s agenda to engage non-state actors in the formulation of tax policies and tax administration procedures.
We commend the Government of Zambia for its extensive efforts to solicit proposals from the public during the budget process, which we have witnessed firsthand.
USAID Revenue for Growth has conducted, and will continue to conduct, initiatives to provide a platform for non-state actors to discuss tax issues and also to build the capacity of non-state actors in conducting economic analysis, advocacy and other areas to enhance their effectiveness in discussing tax issues and developing evidence-based tax proposals.
As I close, allow me to again reiterate that the United States government, through the USAID Revenue for Growth project, looks forward to continuing to work with the MoFNP, ZRA and other government entities, and to strengthening our partnership for a prosperous, more equitable, Zambia.
Thank you for providing us an opportunity to contribute to this event.