GOVERNMENT will not default in paying the country’s external debt standing at US$ 10. 5 billion, Finance minister, Margaret Mwanakatwe, has said.

And Ms Mwanakatwe said that Government would only consider reducing taxes if individuals and firms up their tax compliance.

She said this at the official opening of the 34th Zambia Institute of Chartered Accountants (ZICA) Annual General Meeting in Livingstone yesterday.

Ms Mwanakatwe said that US$ 3 billion of the external debt was the Eurobond, 30 percent of it was the Chinese debt and the remainder was multilateral and bilateral.

She assured that Government would not default in paying the country’s external debt, saying that money was being put aside from whatever revenue collected to go towards debt clearing.

“My external debt as you is US$10.5 billion and arrears of about K15 billion. We will not default on external debt, we dare not, we will not default. That’s why for us when we do receive revenue from all areas whether its non-tax or tax, the first thing we do is to put aside what is going to be owing to external debt because if we default we are in trouble,” she said.

And Ms Mwanakatwe said that Government would only reduce taxes if compliance levels improve. She said that Government need to collect more money as possible to fund projects and provide services to the people of Zambia.

Meanwhile, Ms Mwanakatwe also assured that Government would dismantle a significant amount of pension arrears this year.

She said that about K1 billion to pay arears, saying that Government would dismantle pension arrears substantially this year.

And ZICA president Jason Kazilimani has thanked Government for its support to the institute.