Consolidated Revenue Fund is a term used in many countries which derived their political systems from the Westminster model to describe the main bank account of the government. All tax and non-tax revenue is paid into the fund unless Parliament has specifically provided otherwise by law. Any money received by the government which is not taxation, and is not to be retained by the receiving department (for example, fines), is classed as a Consolidated Fund extra receipt (CFER). These funds are to be paid into the Consolidated Fund as soon as they are received in order to ensure transparency and accountability. Parliament gives statutory authority for the Government to draw funds from the Consolidated Fund by Acts of Parliament known as the Appropriation Act and Consolidated Fund Act. This ensures transparency and accountability in the use of such funds.
The Consolidated Revenue Fund was a proposal from former Zimbabwe Revenue Authority Commissioner-General Gershem Pasi in 2014 that all government departments that collect revenue should remit it to Treasury. The government was encouraged to seriously work on having a Consolidated Revenue Fund as was the case before. He said this issue of individual departments holding onto government revenue was unacceptable and as already stated it could easily be abused. Pasi said it was difficult to trace revenue collected on behalf of the government if this money was not remitted to Treasury.
How CRF works
The account into which all state funds and out of which state payments are disbursed is called the Consolidated Revenue Fund (CRF). This is provided for in section 302 of the Constitution of Zimbabwe: “There is a Consolidated Revenue Fund into which must be paid all fees, taxes and borrowings and all other revenues of the Government, whatever their source, unless an Act of Parliament –
- requires or permits them to be paid into some other fund established for a specific purpose; or
- permits the authority that received them to retain them, or part of them, in order to meet the authority’s expenses.
There are good reasons for centralising the collection and disbursement of public funds. It is to promote transparency and fairness in the use and allocation of revenues. This is why the Constitution in section 305 provides detail on the national budget managed by the Minister of Finance, which deals with revenue collection and expenditures, among other things. The Constitution also clearly controls the manner in which money from the CRF is used. Section 303 states as follows:
- “No money may be withdrawn from the Consolidated Revenue Fund except to meet expenditure authorised by this Constitution or by an Act of Parliament.
- Money withdrawn from the Consolidated Revenue Fund must be paid only to the person to whom the payment is due.
- An Act of Parliament must prescribe the way in which—
- withdrawals are to be made from the Consolidated Revenue Fund and any other public fund; and b. money in the Consolidated Revenue Fund and any other fund is to be held and invested”.
What is clear from this provision is that all withdrawals of public funds to fund any expenditures must be made from the CRF. However, in the exceptions where any other public fund is used, this must be on the authority of an Act of Parliament. In other words there must be legislation to permit and guide that process.