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Covid-19 saves Zimbabwe millions

by Staff reporter
03 Jul 2020 at 08:31hrs | Views
THE Covid-19 pandemic has achieved what the government has failed to accomplish for decades: drastically slash the amount of money spent on foreign travel.

According to the latest consolidated statements of financial performance from Treasury, expenditure on foreign travel decreased from ZW$150 million in February to ZW$30 million in March.

However, taxpayers should temper any celebration with caution, as it also emerges that the money spent by the government on "training expenses" shot up from ZW$9 million in February to ZW$125 million in march.

Overall, Treasury reported a ZW$344,541 million fiscal deficit for the month ended April as recurrent expenditure continues to rise.

Total expenditure stood at ZW$4,162 billion compared to total revenue of ZW$3,818 billion. For February and March, Treasury managed to collect revenue of ZW$3,895 billion and ZW$6,103 billion, respectively.

In February, Treasury recorded a budget surplus of ZW$64,435 million while in March it incurred a deficit of ZW$910,498 million.

Treasury has been in violation of Section 38 of the Public Finance Management Act which stipulates the publication of consolidated accounts within 30 days of each month-end.

The statement showed that while total income outpaced the projected target by 11%, recurrent expenditure continued to gobble up public funds, further limiting the fiscal space.

The civil service wage bill for the period under review totalled ZW$1,720 billion against a target of ZW$1,194 billion, giving rise to a variance of ZW$526,204 million.

"The variance was because of payments for backdated increments for pensioners and civil servants," it financial statement reads.

Expenses on use of goods and services amounted to ZW$713,517 million against a target of ZW$660,896 million, with major contributors being rental and other charges, training expenses, institutional provisions, maintenance and other goods and services.

Grants contributed a major part of expenses to the tune of ZW$1,057 billion. The main ones were salary grants of ZW$434,877 million to grant-aided institutions.

The consolidated statement reveals that taxes on income contributed ZW$1,068 billion against a target of ZW$745,380 million while taxes on goods and services contributed ZW$2,674 billion against a target of ZW$3,483 billion.

"This was mainly due to less trading activities on the market during the lockdown," it said.

Revenue sub-heads such as customs duty, value-added tax and excise duty did not meet targets. Taxes on financial and capital transactions recorded a positive variance of ZW$197,385 million.

"This is attributed to intermediated money transfer tax which contributed $786,88 million against a target of $590 million due to an increase in use of mobile money transfers during lockdown by the public," the statement reads.

Non-tax revenue recorded a negative variance of ZW$7,954 million due to property income which did not meet target.

Transactions on non-financial assets amounted to ZW$309,609 million against a target of ZW$688,730 million while financial assets amounted to ZW$4,1 billion.

Source - the independent

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