The 2027 Budget: What Ordinary Zambians Should Expect
I listened to the Minister’s budget speech live this afternoon. Let us blame it on the weather, but Dr Musokotwane was not his usual confident self. He stumbled over several figures, and his explanations off the cuff were not always clear.
Worse, the speech and its own annex do not agree in several places. The top PAYE threshold is K37,000 in the speech and K34,000 in the annex. The duty on ceramic tiles rises from 25% in one and from 5% in the other. Some measures in the annex were never announced in the House at all. I turned to the ZRA’s overview of tax changes for answers. It settles some questions but leaves others open, and it has errors of its own. One gets the impression the Minister and his team needed another week to iron out the inconsistencies.
Parliamentarians will have to demand more detail and better clarity. So should every Zambian citizen. This is our money.
The key pillars
1. A K284.8 billion budget, paid for mainly by raising revenue. New tax measures are expected to bring in K10.8 billion.
2. Debt first. Debt service takes K67.6 billion, more than twice what goes to health.
3. Repairing the election-year damage. The 2026 deficit reached 5.9% of GDP against a 2.1% target. The 2027 target is 3%.
4. Lower ambition on growth. The target is only 4.9%, despite talk of “Grow Zambia”.
5. Some social commitments are kept. CDF stays at K40 million per constituency, and the social cash transfer rises from K400 to K450.
Who wins
• Banks, bondholders and external creditors
• Mining houses: no windfall levy despite record copper prices, though they now pay 15% on dividends and higher licence fees
• Consistently profitable companies, which are freed from Minimum Alternative Tax
• Tourism operators and some local manufacturers, through duty relief and protection
• Women and girls, through duty- and VAT-free inputs for locally made sanitary pads (credit where it is due)
Who loses
• Every shopper. VAT goes up to 16.5%, sugar is taxed at K1 per kg, and new taxes hit cooking oil, sweets, plastic bottles and packaging.
• Marketeers and small traders. The mobile money levy doubles in every band, and small payments pay the highest share.
• Farmers. Tax on farming and agro-processing rises from 10% to 15%, and on fertiliser producers from 15% to 20%. FRA is cut back to strategic reserves, and FISP starts moving to loans as El Niño threatens the harvest.
• Workers. There is no PAYE relief while prices rise.
• Families needing documents. Replacing a lost birth certificate goes from K8 to K300, and registering a marriage from K7 to K500. Passports are up 50%.
What the ordinary Zambian should expect
Expect higher prices for sugar, cooking oil, drinks and everyday goods. Expect to pay more every time you send money by phone. Expect mealie-meal to feel the pressure of higher taxes on millers, fertiliser and truck tolls. And expect no fuel relief: the budget says nothing about it.
Meanwhile, copper sells at near-record prices and output is at a record 930,000 tonnes, yet the people’s share of that wealth remains small.
The government deserves credit where it moved in the right direction: taxing top earners, taxing mining dividends and tightening controls on gold smuggling. But the burden of this budget still falls mainly on working families.
The Socialist Party’s detailed post-budget analysis is ready for distribution. It covers the full figures, the inconsistencies, the questions Parliament must ask and our alternative proposals. Contact us on +260 972 824 126 for a copy.
Dr Cosmas Musumali General Secretary, Socialist Party