Challenges require fiscal strategy re-orientation

06 Feb 2023

The current global and domestic operating landscape that presents fiscal policy challenges require the country to re-orient its fiscal strategy, Minister of Finance, Ms Peggy Serame has said.

Delivering the 2023/24 budget yesterday, Ms Serame said the move would help government achieve an appropriate balance between revenues, expenditure and debt accumulation and also ensure that debt servicing costs were sustainable.

She said the fiscal strategy in the 2023/2024 budget and beyond would continue to be strengthened to achieve objectives of running surpluses and re-building buffers.

For the medium to long term sustainability,she said,  the ministry would explore the possibility of enacting into law the revenue fiscal rule highlighted in the NDP11 in order to restore sustainability.

In the immediate term, the country would focus on strengthening fiscal prudence and discipline, enhancing revenue mobilisation, improving the efficiency of public spending, restoring government’s net financial assets and debt sustainability as well as improving budget transparency and participation,she said.

Minister Serame pointed out that the fiscal policy shift as depicted by the changes in expenditure, revenue and debt dynamics were part of the country’s transformation.

“In light of this, we will continue to implement prudent fiscal policy in line with international best practices as part of a broader macroeconomic management framework,” she said.

Furthermore, she said  government remained committed to implementing its fiscal consolidation programme focused on reducing the public sector wage bill, grants and subventions and introducing widespread state-owned enterprise reforms.

The minister said the efforts, were aimed at reducing government’s economic footprint and increasing the space for the private sector, adding that as a cost containment measure, government would continue to review subventions and grants to state-owned enterprise and local authorities with a view to reducing the allocations to the extent possible.

To ensure accountability, transparency, efficiency and value for money, she said, the ministry would continue to conduct audits for various expenditure items, targeting sectors such as transport, agriculture and health sector to clamp down on inefficiencies, irregularities and cases of mismanagement.

She explained the ministry had already audited the tertiary education financing department.

Ms Serame also emphasised the need to diversify and expand the fiscal revenue base in the face of long-term structural declines in mineral and SACU revenues.

In this regard, Botswana Unified Revenue Services (BURS) continued to put measures in place to improve tax revenue collections, she said.

She stated that in the 2023/2024 financial year, BURS would complete a number of initiatives including introduction of electronic billing/invoicing platforms to improve VAT compliance, introduction of a digital marking and tracking solution for excisable goods to ensure that legitimate duties and taxes were paid on imported goods.

Other initiatives, she said included enhanced capacity in the use of non-intrusive equipment (scanners), implementation of the Debt Recovery Strategy and strengthening of the Tax Audit function and capacity of the large taxpayers unit.

All those efforts, she said were geared towards improving taxpayer compliance and border security, thereby reducing revenue leakages and enhancing collection as well as strengthening trade facilitation.

The minister said other areas that they would focus on in the next financial year included the revenue raising capacity of councils and land boards.

On improving the efficiency of public expenditure, she said a number of reforms were being implemented to address the challenges of poor project implementation, including enhancement of the development project monitoring system expected to be completed by December 2023. ends

Source : BOPA

Author : BOPA

Location : GABORONE

Event : Parliament

Date : 06 Feb 2023