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Wednesday, 4 February 2009

The Auditor General's Report for 2007

The heavily trailed Auditor General's report on the accounts for the financial year ended 31st December 2007. This is the source of the many facts you have read recently the rampant mismanagement of various government ministries and much more. Well worth the read. It has been hard to find!

Report of the Auditor General on Accounts for 2007


  1. There are plenty of items in the AG report worthy of public outrage, one can only wonder what they might have found with more staff (something which they claim to have been addressing, so we can hope for even more comprehensive audits for coming years). The single largest item of interest to me is, What happened to the VAT? Here's what I mean:

    2007 Domestic VAT (in ZMK):

    IMF Prediction: . . . . . . . . . . . 531,700,000,000
    GRZ Prediction: . . . . . . . . . . . 669,053,228,000
    Gross Actual Collections: . . 2,029,600,920,503
    Refunded Collections: . . . . . 2,006,060,920,503
    Net VAT Returned to Treasury: 23,540,000,000

    Would someone please explain: What is the use of a Tax if you just give back 99% of it? How much did the GRZ spend administrating the VAT in 2007? How much did it cost business to comply with VAT bureaucracy?

    At this point I am merely hopeful that they are breaking even and collecting enough tax to cover their own salaries and allowances.

  2. Yakima,

    Yeah that does not look good. At all!!

  3. Cho,

    Well, it is only 2 trillion kwacha in taxpayer money (at 2007 exchange rates about US$500 million). I am probably just overreacting!

    Seriously though, did something change on a regulatory level to account for 98.84% of "Gross Actual Collections" being "Refunded"? Even if we account for the fact that VAT eligible activity was 3 times higher than the initial GRZ budget prediction for 2007, it still appears that they only collected 3.5% of their original revenue target.

  4. I find it almost incredible that $500 million in VAT would just be refunded. That's almost as much as 'donor aid' ($600 million) the GRZ received in 2004.


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