Matambo tightens control on resources usage
Isaac Pinielo | Wednesday February 8, 2017 18:00
Delivering the 2017/18 Budget Speech on Monday, Finance and Economic Development minister, Kenneth Matambo expressed the need for the government to reduce wastage.
“Government will tighten controls by prohibiting, among others, awarding of tenders or contracts without proof of availability of funds,” Matambo said.
He added that there will be no signing of lease agreements without budgetary provision, and virements or re-allocations of funds to cover over-expenditure, overtime allowances or any expenditure without approval of the Finance ministry.
The minister further noted that the ministry is considering proposals by the Taxation Review Committee of how to diversify the government revenue base, which include adjusting various taxes, levies, permits and licences and reviewing some tax expenditures such as Value Added Tax (VAT) exemptions.
Other proposals that the ministry is considering include introduction of Transfer Pricing rules in the Income Tax Act that will curb any undesirable tax avoidance as well as underscore the alignment of Botswana tax system to international best practice.
The government also seeks to amend the Income Tax Act, among others, to impose a penalty for non-filers irrespective of whether there is any tax to pay or not; and amending the Value Added Tax Act to include sale of property by a Deputy Sheriff as a taxable transaction.
“The country’s fiscal situation has recently been characterised by slow growth in government revenues and increased pressure on expenditures, as a result of the implementation of programmes such as the Economic Stimulus Programme,” Matambo said.
According to him, total expenditure and net lending during the 2015/16 periods stood at P54.41 billion of which P40.41 billion was recurrent expenditure, while P12.77 billion was development expenditure.
He noted that the balance of P1.23 billion was accounted for by equity injection and net lending to state-owned enterprises.
Total revenues and grants are estimated at P57.19 billion, while total expenditure and net lending is estimated at P59.54 billion, resulting in a projected budget deficit of P2.35 billion or 1.43% of gross dometic product for the financial year 2017/18.
“This deficit is mainly due to the budgetary provision for power and water projects as well as the implementation of the Economic Stimulus Programme that includes education and health care services,” he said. Despite the projected budget deficit for the 2017/2018 financial year, the minister stated, the government is committed to fiscal sustainability in the medium term.