Loans Act to be repealed

 Loans Act to be repealed

Government says it will take a Bill to Parliament to repeal and replace the Loans and Guarantees Authorisation Act so that it prescribes the manner in which Government acquires loans.

The Ministry of Finance says this will prevent over borrowing which has been one of the main reasons why debt has grown.

But a statement issued by the ministry said that for 2022, the proposed deficit is 6.7 of GDP and will be financed by both domestic and external borrowing as proposed in the Appropriation bill.

And the Ministry said the 173 billion Kwacha it proposes to spend in this year’s budget does not mean that it will be financed from domestic revenue.

The Ministry also said only 77.9 billion Kwacha or 45 percent of the 2022 Budget will be financed from taxes.

The balance will be financed through borrowing externally and domestically.

Meanwhile, the Ministry dismissed assertions that the 2022 National Budget is taxing people beyond the capacity of the economy.

The Ministry said Government has actually provided tax incentives for citizens and companies.

The statement says the Government increased the exempt threshold for Pay-As-You-Earn from 4,000 Kwacha to four thousand five hundred per month so that employees can have some tax relief.