Treasury ponders budget rethink
Secretary to the Treasury MacDonald Mafuta Mwale says there is need to seriously review the national budget formulation to move towards widening the tax base to support services as currently 78 percent of resources go towards mandatory obligations.
He said this on Wednesday in Lilongwe when he appeared before the Parliamentary Committee on Media, Information and Communications to explain why government has allocated K700 million towards the Last Mile Rural Connectivity project which requires K50 billion to erect 136 towers by 2025 to promote access to information and communications technology (ICT).
Some of the mandatory obligations taking the lion’s share include payment of salaries and wages, debt charges for which government is liable, pensions and gratuities and compensation refunds.
Mwale admitted that the allocation to the project is too low as it can only cater for two towers largely because resources are a limiting factor and it would be difficult for government to allocate K50 billion towards the project.
He said the K3.7 trillion 2023/24 fiscal plan is under pressure due to mandatory obligations.
Data contained in the budget statement shows that the wage bill currently stands at K900 billion, debt interests are budgeted at K914 billion while pensions is pegged at K37 billion.
Said Mwale: “Mandatories take up a big part of the budget, which is about 78 percent of the budget. The country is running on 22 percent of the budget.
“The only way out is to broaden the tax base. There are some measures that government is considering to broaden the tax base.”
Committee chairperson Susan Dossi said they are disappointed because there is little allocation towards the towers for the project.
She said failure to allocate resources is depriving people, especially the rural masses, the right to information.
Said Dossi: “You have only given Ministry of Information K700 million for two towers on this project. It is really sad and we are really not happy with this.
“We feel we are not doing justice to our people. People need Internet, they need connectivity. They need to talk to others but we are depriving them.”
She urged Treasury to push for funding for the project, saying if the country can at least construct 100 towers by 2025, it would help promote access to ICT.
In the current fiscal plan that runs up to March 31 next year, total revenue and grants are estimated at K2.55 trillion, with domestic revenue projected at K2.24 trillion.
Out of the domestic revenue, tax revenue is estimated at K2.13 trillion while other revenues are estimated at K114.34 billion.
