2017 Budget Highlights | KPMG | ZM

Zambia: Budget for 2017

2017 Budget Highlights

A summary of the National budget which was presented by the Hon. Felix C. Mutati MP, Minister of Finance. Delivered to the National Assembly on 11th November 2016


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The Government has designed a home grown Economic Recovery Programme dubbed “Zambia Plus” which is aimed at ensuring sustained and inclusive growth over the medium term. The programme is expected to be complemented by external support from the Cooperating Partners and the International Monetary Fund (IMF). Discussions with the IMF will be conducted in first quarter of 2017 to augment Zambia Plus.


Some notable highlights of the budget include:

  • On the domestic front, the Zambian economy faced a number of challenges: low commodity prices including copper, electricity deficits, high inflation, a deteriorated external sector and Government’s challenge to fully finance its commitments
  • The macroeconomic objectives for 2017 will be to: achieve real GDP growth of at least 3.4%, attain end year inflation of no more than 9.0%, attain domestic revenue mobilisation of at least 18.0% of GDP, limit the overall fiscal deficit to no more than 7.0% of GDP on a cash basis, maintain domestic borrowing to no more than 2% of GDP, build up foreign exchange reserves to at least 3 months of import cover by end 2017, and support the creation of at least 100,000 decent jobs
  • Government proposes to spend a total of ZMW64.50 billion or 27.7% of GDP. In terms of financing the budget, ZMW42.9 billion will be through domestic revenues, K2.23 billion through grants from our Cooperating Partners and ZMW19.33 billion through debt financing from domestic and external sources
  • Key expenditure items budgeted for include: ZMW2.9 billion on a restructured Farmer Input Support Programme (FISP) that will place greater reliance on the E Voucher System to reduce overheads and waste associated with the current arrangements. Also targeted at the agricultural sector is ZMW942.5 million for the maintenance of strategic food reserves. There are also key allocations of ZMW 8.6 billion for road infrastructure projects and a further ZMW3.3 billion to accelerate the dismantling of arrears to suppliers
  • The proposed domestic revenue measures that are expected to raise a total of ZMW42.95 billion, representing 18.4% of GDP, include: income tax-ZMW19.6 billion, VAT-ZMW9.46 billion, Customs and Excise-ZMW7.99 billion, non-tax revenues-ZMW5.32 billion and other revenues- ZMW0.52 billion
  • Key tax revenue measures proposed include the following: an increase in the Advance Income Tax (AIT) rate on import of goods from 6-15%; increased excise duty on airtime from 15 to 17.5%; the revision of the turnover tax system from a flat 3% to six bands (each with their own presumptive tax rate) with an upper limit of ZMW 20 800.00 per month; PAYE that features an extended tax free band by ZMW300 per month and an increased maximum rate of 37.5%; changes to the VAT system which include petrol no longer being recoverable; and the suspension of customs duty on various aquaculture implements for a period of three years
  • Beyond the summary referred to above, there are numerous fiscal and non-fiscal measures that underpin this budget, described in greater detail in the rest of this budget highlights document


Download the 2017 Budget Highlights at this link

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