The Treasury is facing a major task of tackling weak income generation with tax revenues have come down considerably and the budget deficit gone .

The amendments to revenue proposals have disfigured the 2016 budget beyond identification, an economic expert said.

The government’s action of tax hike increases revenue and help to reduce the budget deficit, he said adding that like spending cuts, it could cause lower spending and lead to a fall in economic growth.

One of the best ways to reduce the budget deficit as a percentage of GDP, is to promote economic growth. With economic growth, people pay more VAT, companies pay more corporate tax (tax on profits), and workers pay more income tax.

High economic growth, will reduce the budget deficit as there is need to raise tax rates or cut spending, he disclosed.

IMF loans are meant to help member countries tackle balance of payments problems, stabilize their economies, and restore sustainable economic growth, he added.