Zambia's 2027 budget leans on taxes to finance services
Domestic revenue would cover 82.1% of spending in the proposed K284.8 billion budget, up from 58.7% in 2021, according to the Budget Speech.
Zambia's proposed K284.8 billion budget for 2027 expects K233.7 billion in domestic revenue, made up of K178.1 billion in taxes and K55.6 billion in non-tax revenue. Domestic revenue would finance 82.1% of spending, compared with 58.7% in 2021 and 76% in 2024.
Professor Lubinda Haabazoka, writing in Mwebantu, acknowledged that taxes cut workers' disposable income and can squeeze business margins, but argued they fund schools, hospitals, roads and electricity. The budget sets aside K38.2 billion for education, K30.3 billion for health and K10.4 billion for Social Cash Transfers, which reach more than 1.6 million households.
He said the government still plans K41.9 billion in borrowing and K9.2 billion in grants. Rejecting revenue measures without credible alternatives, he wrote, would mean more borrowing, unpaid obligations or fewer services.
Why it mattersWorkers and businesses face higher taxes to fund the budget, which would reduce disposable income and squeeze margins, as the column acknowledges.