Treasury beats revenue targets

The Ministry of Finance, Economic Development and Investment Promotion managed to beat its revenue targets in the fourth quarter of last year, although expenditure also grew beyond projected estimates as a result of increased spending on social welfare benefits due to the effects of the El Niño-induced drought.

This is contained in monthly budget performance statements from September to December of 2024, which were gazetted and tabled in Parliament last week.

The statements were tabled in terms of the provisions of the Public Finance Management Act.

Total revenue for September 2024 reached ZWG10,75 billion, exceeding the budgeted target of ZWG7,95 billion by 35,21 percent.

“This surge was primarily driven by higher-than-expected taxes on income (up 51,13 percent) and taxes on financial and capital transactions (up 251,77 percent).

“Year-to-date, revenue stands at ZWG62,40 billion, slightly under-performing by 1,46 percent against the budgeted ZWG63,32 billion,” reads part of the statement for September.

Expenditure for September 2024 was ZWG7,74 billion, marginally exceeding the budget target of ZWG7,61 billion by 1,71 percent.

While most recurrent expenses were controlled, spending on social benefits and grants was notably higher.

Significant resources were directed towards the food deficit mitigation strategy, aimed at cushioning vulnerable populations affected by the El Niño-induced drought.

“Year-to-date, total expenditure reached ZWG66,54 billion, closely aligning with the budget forecast of ZWG65,64 billion, showing a slight variance of 1,36 percent,” further reads the statement.

For October, revenue reached ZWG17,05 billion, exceeding the budgeted target of ZWG10,99 billion by 37,11 percent, with Treasury attributing the surge to the devaluation of the ZWG against other currencies, which inflated revenue collected in foreign currency terms when converted to the local currency.

“Year-to-date, total revenue stands at ZWG79,45 billion, surpassing the budgeted ZWG74,31 billion by 6,92 percent,” reads the statement.

Total expenditure for October was ZWG14,12 billion, significantly exceeding the budget target of ZWG 7,73 billion by 82,56 percent.

This was also primarily driven by the devaluation of the ZWG against other currencies, which increased the cost of expenditures denominated in foreign currency.

Year-to-date, total expenditure stands at ZWG 80,65 billion, surpassing the budgeted ZWG73,38 billion by 9,92 percent.

“The sharp revenue and expenditure increases reflect fiscal pressures from currency devaluation, distorting the budget’s performance,” reads the statement.

For November, revenue reached ZWG17,98 billion, exceeding the budgeted figure of ZWG11,14 billion by 62,44 percent.

Total expenditure for November was ZWG13,80 billion, surpassing the budgeted level of ZWG9,63 billion by 43,34 percent.

“The sharp devaluation of the ZWG has increased the cost of expenditures denominated in foreign currencies, distorting budget performance.

“Year-to-date, total expenditure reached ZWG94,46 billion — 13,80 percent above the budget — reflecting ongoing fiscal pressures amid broader economic challenges.

“The sharp revenue and expenditure increases reflect the fiscal pressures resulting from the devaluation of the ZWG, which is distorting the budget’s performance,” the statement reads.

In December, total revenue reached approximately ZWG20,42 billion, surpassing the budgeted target of ZWG11,22 billion by 81,85 percent.

“This significant revenue performance was driven by robust collections across various tax categories, especially taxes on income and profits, value-added tax, and customs duties.

“Non-tax revenue also recorded an exceptional increase, primarily due to strong property income and sales of goods and services. The notable increase in revenue figures is also attributable to the depreciation of the ZWG, which has elevated the value of revenues collected in foreign currency when converted to ZWG,” the statement reads.

Total expenditure for the same month was approximately ZWG19,39 billion, significantly exceeding the budgeted figure of ZWG7,60 billion by 155,09 percent.

“This substantial overspending was primarily driven by recurrent expenditures, particularly compensation of employees, subsidies, and social benefits.

“Additionally, grants contributed to the heightened expenditure. Consequently, the Government recorded a surplus of approximately ZWG1,03 billion for the month, which was significantly lower than the anticipated surplus of ZWG3,62 billion,” the Treasury said in the statement.

Treasury noted the budgetary pressures caused by exchange rate fluctuations and underscored the need for prudent fiscal management to mitigate the impact of exchange rate fluctuations on public finances.-herald