Zambia’s Medium-Term Revenue Strategy sets out to raise domestic revenue by 2 to 4 percentage points of GDP by 2031. The presentation used to open public consultations on Thursday shows, pillar by pillar, how the government intends to get there, and how large the gap actually is.
Key Takeaways
- The strategy presented at Thursday’s launch targets 2 to 4 percentage points of GDP in extra domestic revenue over five years, building on a revenue-to-GDP ratio that reached 22.2% in 2025, up from 18.5% in 2015.
- A preliminary 2027–2029 spending plan of about 25.4% of GDP against a projected 23.5% of GDP in domestic revenue leaves a 1.9-percentage-point gap still to close.
- Debt service already takes 6 to 7% of GDP, with interest payments alone above a quarter of total government revenue. The wage bill takes about 10% of GDP and social spending roughly 9.5%.
- Four pillars carry the plan: tax policy reform, stronger tax administration, a wider tax base and better coordination between government, business and civil society. Property taxation is singled out as “a significant infantile area of taxation.”
- Thursday’s meeting only opened the process. More technical consultations run from November 2026 to June 2027 before government adopts a final strategy.
Zambia’s 2027–2031 Medium-Term Revenue Strategy aims to raise domestic revenue by 2 to 4 percentage points of GDP over five years, according to the presentation the Ministry of Finance and National Planning used to open public consultations at the Mulungushi International Conference Centre on Thursday. The Zambian Economist reported the launch itself earlier this week: who would speak, and why government wants a five-year framework rather than another year of Budget-by-Budget tax changes. The slides delegates saw on the day add the numbers behind that ambition, and show for the first time in public form what the four pillars of reform actually contain.
The gap the strategy has to close
Zambia’s revenue-to-GDP ratio has climbed over the past decade, from 18.5% in 2015 to 22.2% in 2025, according to the government’s own presentation. Spending has fallen back from its pandemic-era peak of 34.6% of GDP in 2020 to 26.4% in 2025, but it has stayed above revenue every year in between. The presentation puts a number on what that gap looks like going forward: preliminary total expenditure for 2027–2029 runs to about 25.4% of GDP, against a projected 23.5% of GDP in domestic revenue. That is a shortfall of roughly 1.9 percentage points of GDP a year still to be closed by reform, growth, or both.
Four items absorb most of the budget before a single new programme is funded. Debt service takes 6 to 7% of GDP, with interest payments alone above a quarter of total government revenue. The public-service wage bill runs to about 10% of GDP, close to 40% of domestic revenue. Social spending on education, health and social protection adds roughly 9.5% of GDP, and agricultural support regularly exceeds 2% of GDP. Transport, electricity and water infrastructure carry what the presentation calls “significant gaps” on top of all of that.
| Item | Share of GDP |
|---|---|
| Preliminary total expenditure, 2027–2029 | ~25.4% |
| Projected domestic revenue, 2027–2029 | ~23.5% |
| Financing gap | ~1.9% |
| Debt service (interest alone >25% of total government revenue) | 6–7% |
| Public-service wage bill (~40% of domestic revenue) | ~10% |
| Social spending (education, health, social protection) | ~9.5% |
| Agricultural support | >2% |
The prize: what 2 to 4% of GDP is meant to buy
The strategy states its own ambition plainly: 2 to 4 percentage points of GDP in additional domestic revenue over five years. Government lists four things that money is meant to buy: reduced reliance on debt, stronger fiscal sovereignty over how development is financed, more resources for health, education and social protection, and financing for the infrastructure that underpins growth.
That framing only makes sense against what came before it. Zambia spent nearly K70 of every K100 in domestic revenue on external debt service before its 2020 default and subsequent restructuring; that figure is now closer to K15, as Secretary to the Treasury Felix Nkulukusa set out this week. The Medium-Term Revenue Strategy is the next step in the same story. Having freed up fiscal space by restructuring old debt, government wants a revenue system reliable enough that it does not have to borrow its way into a similar position again.
Pillar one: tax policy reform
The first pillar targets the design of the tax code itself, not just how well it is enforced. The presentation calls for a rationalisation of tax expenditures, a review of the incentives and exemptions Zambia currently gives up, to improve revenue yield and cut distortions that favour some sectors over others. It also proposes simplifying the corporate income tax regime, on the argument that a more predictable CIT system supports compliance as much as investment. A shorter, forward-looking section flags three areas Zambia has not yet legislated for in depth: the global minimum tax, carbon taxation, and better taxation of the digital economy.
Pillar two: strengthening tax administration
The second pillar is about collecting what the law already allows more efficiently, an area the presentation calls one of the most immediate opportunities to raise revenue. It centres on expanding the Smart Invoice System, the electronic invoicing platform the Zambia Revenue Authority uses to track VAT compliance in real time, which has already tied one firm’s compliance to its customers’ input VAT position. The plan also calls for modernising customs administration, to tighten border management, cut evasion and lift trade revenue, an area where Zambia’s landlocked geography and reliance on transit routes through neighbouring ports make enforcement harder than in coastal economies.
Pillar three: expanding the tax base
The third pillar is where the strategy is most candid about where Zambia has left revenue uncollected. Property taxation, the presentation states, “remains largely underdeveloped in Zambia and represents a significant infantile area of taxation,” unusually blunt language for a government document, and a signal that residential and commercial property could face new or better-enforced rates over the plan’s five years. The pillar also proposes integrating informal businesses into the tax system through simplified regimes and clearer compliance pathways, rather than escalating enforcement against traders who are unregistered because registration is difficult, not because they are evading. A third strand leans on mobile money and digital payment platforms to widen the base through data rather than new field audits.
Pillar four: governance and institutional coordination
The fourth pillar is the least visible to taxpayers and arguably the hardest to deliver. It sets out the strategy’s central management problem: five years of reform depend on sustained coordination across central government ministries, revenue and oversight bodies including the Zambia Revenue Authority, the Auditor General and the Zambia Public Procurement Authority, business associations such as the Zambia Association of Manufacturers and the Chamber of Mines, and civil society, academia and cooperating partners including the IMF, the World Bank and GIZ.
Government frames its own role deliberately: it will lead the process, but ownership sits with the country. The strategy’s five guiding principles, fiscal sustainability, predictability and stability, fairness and equity, efficiency and simplicity, and transparency, accountability and trust, are the standard delegates and, eventually, taxpayers are being asked to judge it against.
What different groups are being asked to accept
The presentation closes with messages aimed at specific audiences, each one a signal of where friction is expected. Large taxpayers are promised improved policy predictability and fewer abrupt annual tax changes, in exchange for accepting a five-year reform horizon rather than case-by-case lobbying each Budget cycle. Small and medium enterprises and the informal sector are told the priority is easier compliance and formalisation, not simply more enforcement and taxpayer fatigue, a distinction that will only mean something once specific measures are published. Investors are offered more stable, evidence-based treatment of tax incentives and investment rules.
Civil society gets a platform to monitor fairness, accountability and the link between taxation and public service delivery. Private-sector representatives are asked to use the process to explain, concretely, what barriers stop businesses investing, expanding, formalising or contributing more to the revenue base. And sector ministries beyond Finance and the Zambia Revenue Authority are reminded this is not only a Treasury exercise: agriculture, mining, energy and other sector constraints shape both production and the tax base that funds it.
What happens next
Thursday’s meeting opened the process; it did not conclude it. The presentation is explicit that more elaborate and technical consultations will run from November 2026 to June 2027, ahead of a final strategy document. Columnist Kelvin Chisanga has already set out what he thinks the final document needs to deliver, arguing Zambia’s problem is the narrowness of its tax base rather than the size of its tax take. Government’s own language for the process is “led by Government, owned by Zambia”, a framing that puts the weight of turning four pillars and a 1.9-percentage-point gap into an actual five-year plan back on the same consultation process that opened this week.
Related reading
- Zambia to Launch 2027–2031 Revenue Strategy Consultations on Thursday
- Tax the Economy Better, Not More: The Test for Zambia’s 2027–2031 Revenue Strategy
- From K70 to K15: How Debt Restructuring Changed What Zambia’s Taxes Pay For
- ZRA Smart Invoice: Why Your Supplier’s Compliance Is Now Your Problem
- Zambia Mobile Money Levy 2026: What It Actually Costs You
- Zambia Domestic Financing 2026: Treasury Targets 82% of National Budget
- Zambia MSME Enterprise Graduation Scheme
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