03 Feb 2020

Botswana Unified Revenue Services (BURS) will re-deploy resources in key operational areas to enhance revenue collection and intensify debt–reduction efforts.

Delivering the 2020/2021 budget speech in Gaborone yesterday, the Minister of Finance and Economic Development, Dr Thapelo Matsheka, said BURS would increase inspections on imported goods to curb instances of non-compliance by importers at ports of entry.

Dr Matsheka said while there was scope to adjust tax rates, considering their levels relative to the region, priority would, in the interim, be on improving efficiency in the collection of existing taxes, rather than adjust tax rates.

He stated that a number of measures would be undertaken on revenue and expenditure sides, both in the short and long terms.

Dr Matsheka said his ministry was determined to restore fiscal sustainability in the medium term, and start to build budgets surplus in the last two years of NDP 11, as part of the efforts to rebuild the country’s financial buffers that were seriously eroded over the past few years.

The country fiscal path, he said, was unsustainable, whereas the NDP 11 had envisioned a moderate cumulative budget surplus over the six year period, the last forecast contained in the draft Mid-term Review of NDP 11 project significant cumulative budget deficit over the six year plan period.

He explained that a budget deficit of P5.22 billion was forecast for the 2020/2021 financial year, which was 2.4 per cent of the Gross Domestic Product (GDP).

Such projected budget deficit, he noted, appeared amid expected investment in economic infrastructure to support the transformation agenda.

On the revenue side, he stated that there were various fees, charges and levies, which had not been adjusted for some time, with some having been adjusted a decade ago.

He noted that to address the budget deficit, all fees, charges and levies would be adjusted with effect from April 1, 2020, thereafter on an annual basis.

Measures would also be put in place to implement the cost recovery policy, including collection of tertiary students’ loan repayments, he said.

Touching on expenditure, Minister Matsheka said the policy objective was to maintain government’s current contribution to 30 per cent of GDP and below in order to give space to the private sector. In addition, the composition of the government budget would have to be changed in favour of more development.

 Dr Matsheka said recurrent budget represented consumption, as it comprised mainly of salaries and running costs, while development budget was investment, necessary for growth of the economy.

To achieve transformation, he said, it required more investment in capital projects than spending on consumption and this balance would be altered through process and technology adoption across government.

Furthermore, Minister Matsheka said among the specific expenditure control measures for 2020/2021, his ministry would be working with selected pilot ministries to deal with wastage, focusing on other charges item of the budget.

In particular, the pilot exercise would involve subjecting other charges in the selected ministries to the zero-based budgeting principle for the next financial year.

He said his ministry was reviewing the Public Finance Management Act to enhance the legal and regulatory framework for the control and management of the public finances in line with international best practice. ENDS