TREASURY reported a $74,4 million deficit for the month ended July as recurrent expenditure continues to rise, crowding out key government projects, official figures have shown.
According to the latest consolidated statement of financial performance of the consolidated revenue fund for the period under review, total expenditure stood at $397,7 million compared with an income of $323 million.
The statement showed that while total income outpaced the projected target, recurrent expenditure continued to gobble the trickling revenues, further limiting fiscal space. Employment costs were up 7,56% from the budgeted $142,5 million while goods and services more than doubled the initial forecast of $13 million.
This development comes at a time when the public sector wage is this month further expected to grow on the backdrop of annualised bonuses. Critics say a bloated government formed after the July 31 elections is also going to pile more fiscal pressure.
Value added tax and taxes on income and profits, the report showed, continued to be the main sources of revenue despite concerns that revenue inflows could have flattened due to subdued business activity.
During the period under review, no customs duty was collected from oil products despite an initially projected $960 000. Excise duty on fuels, however, surpassed Treasury targets.
Turning to other taxes, government collected $8 million in mining royalties against $21 million budgted for.
The issue of royalties, generally seen as too high compared with regional peers, has been widely debated in the industry, forcing government to consider revising them should mining companies beneficiate the minerals.
According to the World Bank, the mining sector has to date been the most dynamic sector of the economy, leading the 2009-2011 rebound with average annualised growth of 35,5% and contributing 3,7 percentage points to overall GDP growth of 8,4% during the period under review.