Robertson: Over-taxation spurred US$113 million revenue surplus

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By Alois Vinga

TOP economist, John Robertson says government’s US$113 million revenue surplus in January this year was never a result of any new found financial discipline by authorities but was due to overtaxation on poor citizens.

Finance Minister Mthuli Ncube recently said government managed to spend within budget limits resulting in the surplus.

He said this in a document entitled, “Government’s Progress on Policy Reforms”.

But speaking to this week, Robertson argued that the measures implemented by Ncube towards achieving financial discipline in government were not going to pay off any time soon.

“The surplus has not been achieved due to anything that has to do with financial discipline, but rather, the ongoing widening of the country’s tax base.

“Notably, the 2 percent tax is churning out huge amounts of revenue and this source is now covering up the over expenditures that were experienced in the past,” he said.

Robertson said the increase in fuel taxes last month will also contribute to the budget surplus in the coming months but warned this would only cause further hardship for ordinary citizens.

“So it is not as rosy as the government wants to portray it because people’s buying power has been eroded, demand has gone down drastically at a time when salaries are not even matching the cost of living.

“Such a surplus is only worth celebrating if it is in tandem with economic growth,” Robertson said.

Ncube, in his document, said the January revenue figures of US$508.5 million were realised against disbursements and commitments of US$395.5 million, indicating a surplus of about US$113 million.

In the same month, Electronic Transactions Tax raised US$98.5 million and it is anticipated that an overall US$600 million will be raised in 2019.