Africa-Press – Zambia. Parliament has approved the k173.0 billion 2022 national budget which is equivalent to 37.1% of the country’s gross domestic product (GDP), surpassing the 2021 Budget, which equalled 32.6% of GDP forecast for that year.
The 2022 National Budget is now expected to take effect on 1st January 2022 following its approval. Of the total budget of k173.0 billion, revenues and grants are K100.7 billion representing 21.6 percent of GDP.
The gross financing of K72.3 billion which translates to a budget deficit of 6.7 percent of GDP, will be raised from external and domestic sources, including a drawdown on the special drawing rights.
According to the Minister of Finance and National Planning, Dr Situmbeko Musokotwane, K173 billion in spending is aimed at both supporting the country through the effects of extreme indebtedness and stimulating economic recovery in the wake of the COVID-19 pandemic.
From extending pandemic business support, to putting in place legislation that promotes innovative financing for climate change interventions, the Budget outlines Government’s ambitious plan to rebuild the country in a way that ‘takes resources closer to the people through decentralization’.
The budget also underscored Government’s focus will be to increase output in the agriculture, tourism, mining, manufacturing, energy and transport sectors, to grow the economy and to create employment opportunities.
To achieve the aims of the Budget, including increasing output in the above-mentioned sectors, attaining a GDP growth of at least 3.5%, and reducing inflation to a single digit, the Minister proposed to undertake major legislative and structural reforms.
Notable and cutting across all sectors, the Minister has proposed to reduce the standard corporate income tax rate (CIT) to 30% from 35% for corporate entities. This excludes the top marginal tax rate for telecommunications companies, which is maintained at 40%.
In this article, members of our Corporate Practice give their views on some of the business and tax reforms including: Meanwhile parliament has adjourned sine-die after concluding all business on the order paper.
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