Zambia’s Revenue Revolution: Financing National Development in 2026

By The BalanceHub Editorial Team

In recent years, Zambia’s fiscal story has shifted from aid dependence to a strong emphasis on domestic revenue mobilisation. At the heart of this transformation is the Zambia Revenue Authority (ZRA), whose growing performance has played a significant role in empowering the country to finance its development agenda.

For much of the past decade, Zambia struggled with limited domestic collections and heavy reliance on grants and borrowing. But data from the ZRA shows a sharp rise in revenue mobilisation — from gross collections of K148.5 billion in 2024 to a surplus net revenue of K160.6 billion in 2025, surpassing targets. This was achieved even amid challenges such as tax evasion, avoidance, and delays in refund processing. 

In fact, overall collections have also steadily grown when viewed over a longer period. According to an event held in Lusaka by the ZRA Board Chairperson, revenue mobilisation has climbed from around K58.7 billion in 2020 to K160 billion in 2025, illustrating sustained progress in domestic resource mobilisation. 

Financing the 2026 Budget: A New Era

Minister of Finance Dr. Stumbeko Musokoteani

Zambia’s 2026 National Budget, totalling K253.1 billion, reflects this new fiscal reality. Finance Minister Dr. Situmbeko Musokotwane presented the budget with a clear shift: most of the finances now come from domestic sources, rather than external support. According to official budget figures, about 82% of the national budget is expected to be financed from domestic revenue, with K206.5 billion coming from local collections. 

This means that classrooms, clinics, infrastructure, and essential public services are increasingly funded by Zambians themselves rather than by borrowing or donor grants — a milestone in Zambia’s pursuit of economic sovereignty and self‑reliance.

The Engines of Growth

Several factors have contributed to this upward trajectory:

Modernised Tax Systems

The implementation of digital systems and automation has played a key role in boosting collections and improving compliance, as part of broader reforms to enhance efficiency.

Strategic Targets

The ZRA has set an ambitious target of K185 billion in tax revenue for 2026, which is projected to represent roughly 73.1% of the national budget and approximately 20% of GDP — a strong indicator of the growing role of domestic resources in funding development priorities. 

Rising Contribution to National Budget

The proportion of domestic revenue contributing to the national budget has steadily increased, moving from below 50% in previous years to over 70% in recent budget cycles. This trend highlights the growing capacity of Zambia to support national priorities from within. 

Impact on Social Services and Development

The shift toward stronger domestic financing is more than a number game. It translates into real commitments for sectors that matter to every Zambian:

Education stands to benefit from significant allocations aimed at expanding access and quality.

Health services are set to receive funds for staffing, supplies, and expanded service delivery.

Local infrastructure — through mechanisms such as the Constituency Development Fund — draws directly from domestic collections.

These allocations underscore how revenue growth supports tangible outcomes for households and communities.

Challenges and the Road Ahead

While progress is clear, challenges remain. Compliance rates — the extent to which registered taxpayers fully comply with filing and payment requirements — still have room for improvement. Critics and analysts argue that narrowing this gap will be essential to meet and exceed future revenue targets.

Moreover, sustaining growth in domestic resource mobilisation will require continuous adaptation of policies, taxpayer education, and careful balancing of the tax burden to support business growth while protecting household welfare.

Conclusion: A Turning Point for Zambia

Zambia’s revenue performance over the past decade — culminating in strong collections in 2025 and ambitious targets for 2026 — marks a definitive turn toward economic self‑financing and sovereignty.

The country’s ability to fund the majority of its national budget from domestic taxes not only strengthens fiscal independence but also signals growing confidence in Zambia’s economic framework. While challenges persist, the path ahead reflects an evolving fiscal identity — one shaped by Zambians, for Zambia’s progress.

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