[{"bbox": [97, 153, 1136, 259], "category": "Text", "text": "To perform the task of revenue collection, statutory bodies have been established on behalf of the MoFNP, notably in the following institutions: Zambia Revenue Authority (ZRA), Ministry of Lands and Natural Resources (MoLNR), Ministry of Home Affairs (MoHA), Ministry of Commerce, Trade and Industry (MoCTI), the Road Development Fund, etc."}, {"bbox": [97, 270, 1136, 639], "category": "Text", "text": "Overall, ZRA has a robust tax-administration structure and has made good progress with the modernization and automation of revenue collection processes. The 2022 TADAT (Tax Administration Diagnostic Assessment Tool) results show however that on all but one of the performance indicators, the organization's progress has either stagnated or even slightly reversed since the last TADAT assessment. This result is partly due to the fact that many reform efforts have yet to be fully implemented throughout the entire organization and across the division between direct and indirect taxation. Digitalization has been at the forefront of ZRA's reform initiatives. The organization's backbone system, Tax Online II, is commendable for being a home-grown IT-solution, but suffers from shortcomings, especially in the area of taxpayer data management. The introduction of the Bulk Intelligence Data Analysis (BIDA) system will significantly increase ZRA's ability to effectively analyse taxpayer data and identify cases of non-compliance. Yet, many of the \"offline\" services still remains only available in urban centres where ZRA has offices. To address this challenge, ZRA has initiated a more systematic cooperation with the local Councils. Another persistent challenge for ZRA is the timely management of VAT refunds that have accumulated to unsustainable levels. In addition, the authorities are still struggling to effectively manage the high levels of tax arrears."}, {"bbox": [97, 654, 1136, 760], "category": "Text", "text": "A comprehensive review of the tax regime will soon be initiated through the development of a Medium-Term Revenue Strategy. As an intermediate step, and with the aim to reach a key IMF benchmark of achieving a tax-to-GDP ratio of 22.5% by 2025, the Government has developed a Revenue Mobilization Action Plan for the period 2023-2025 with the assistance of the EU and Germany."}, {"bbox": [97, 772, 1136, 986], "category": "Text", "text": "With the support of the European Union and Germany, the government is actively working on the design of a new PFM Reform Strategy, expected in the second half of 2023. It envisages an inclusive process, identifying current challenges and reform priorities, rather than a fixed set of milestones. As a result, the strategy will evolve during implementation. A new PEFA (including the Gender responsive and Climate module) will be conducted in the second half of 2023, with the support of the European Union, Germany and the IMF. The Government under President Hakainde Hichilema has also committed to improve public sector accountability and it has intensified the fight against corruption. At the request of the GRZ, the IMF has conducted a comprehensive Country Governance Diagnostic to support the authority's efforts to strengthen governance and reduce corruption."}, {"bbox": [97, 997, 1136, 1052], "category": "Text", "text": "In conclusion, the public finance management reform strategy is sufficiently relevant and credible, including on domestic revenue mobilisation, and the eligibility criterion is met."}, {"bbox": [85, 1077, 553, 1104], "category": "Section-header", "text": "### 2.3.4 Transparency and Oversight of the Budget"}, {"bbox": [97, 1119, 1136, 1332], "category": "Text", "text": "Over the past decade, the quality of political and economic governance in Zambia has declined. The public sector faces considerable structural constraints. A focus on short-term political expediency and personal gains, had impaired the implementation of reform plans to strengthen the country's fiscal position and to improve public policy efficiency and effectiveness. Powerful political and economic interests have obstructed the introduction of reforms to key economic sectors. The increasing lack of transparency in the management of public resources made it difficult to assess the efficiency of public policies. The rules related to access to information, asset disclosure by top officials, Beneficial Ownership transparency, monitoring of Politically Exposed Persons, and legal protections for whistle-blowers remain inadequate, limiting citizens' ability to hold those in power accountable."}, {"bbox": [97, 1344, 1136, 1504], "category": "Text", "text": "In the 2021 Open budget Survey, Zambia scored 19 on transparency, on account of limited publicly available budget information and lack of in-year budget execution reports or mid-term reviews of budget implementation. Despite adequate audit oversight, Zambia scored only 56 on budget oversight due to weak legislative oversight during the planning stage of the budget cycle and limited oversight during the implementation stage. The executive tends to systematically circumvent the budget rectification process and submits revisions to the budget for Parliament's ex-post approval, through in-year Excess Appropriation Bills."}, {"bbox": [97, 1515, 1136, 1622], "category": "Text", "text": "After a decade of impunity and erosion of institutions, the authorities have renewed implementation of existing anti-corruption frameworks, as President H.E. Hakainde Hichilema was elected on a strong anti-corruption agenda. Significant legal and structural weaknesses, and deficient implementation practices hinder Zambia's ability to fight corruption and money laundering effectively. These shortcomings include: limited transparency and"}, {"bbox": [1027, 1680, 1145, 1705], "category": "Page-footer", "text": "Page 14 of 33"}]