Thursday, 26 November 2020

MOTOR VEHICLES (10 YEARS OLD ) IMPORTS BANNED : US$30 TAX FOR LANDLORDS

 1552: Mr Speaker Sir, about US$1.3 billion was spent on imported buses, light commercial and passenger motor vehicles from 2015 to September 2020. This is despite the existence of capacity by the local motor industry to assemble the above-mentioned range of motor vehicles. Furthermore, due to lack of effective standards and regulation, road unworthy vehicles, which, in some instances fail to meet environmental and safety standards, find their way onto the market. 

In line with the NDS1, which underscores value addition, I propose to remove second hand motor vehicles aged 10 years and above, from the date of manufacture at the time of importation, from the Open General Import Licence. In the interim, commercial vehicles such as tractors, haulage trucks, earth-moving equipment and other specialised vehicles used in mining and construction will be exempt from this requirement.

A number of enterprises operate from designated business premises where the landlords are either Local Authorities or private property owners such as the Gulf Complex and Kwame Mall, among others. Their place of business is, thus, comprised of partitioned units in commercial buildings.

 The fixed nature of business, thus, presents an opportunity for the tax administration to improve tax collections from presumptive taxes. I, therefore, propose to introduce a presumptive tax of an equivalent of US$30 per unit per month. 

Landlords will be responsible for the collection of the above taxes which take effect from 1 January 2021. Landlords that fail to collect and remit the tax will be subject to a penalty equivalent to the amount of tax payable and interest. Furthermore, landlords have the responsibility to keep accurate records regarding the number of occupants or operators in respective properties, in order to facilitate administration of tax.

Notwithstanding the abundant phosphate deposits, fertilizer manufacturing has gradually declined due to antiquated equipment and competition from imports, among other factors. 

In order to complement the thrust of the National Development Strategy which includes recapitalisation of fertilizer manufacturing companies and investment in new technology, I propose to introduce a Fertilizer Manufacturers’ Rebate, whereby raw materials used in the production process will be imported tax and duty free by Approved Manufacturers. 

1535: As part of a broader reform process under the TSP, Government through the Central Bank introduced market determined exchange rate through the Monetary Policy of (SI 33 of 2019) on 20 February 2019. This entail transition from exchange rate of US$1: $1, initially to US$1: $2.5 and thereafter determined by the interbank market activities. 

This transition resulted in currency losses to small and vulnerable households with deposits less than US$1 000 in the bank. The movement in the exchange rate from US$1: $1 to US$1: $2.5 resulted in a loss for such depositors. 

Therefore, Government has made a decision to compensate the small and vulnerable depositors who had US$1000 and below, for the exchange rate movement loss from US$1: $1 to US$1: $2.5, with resources equivalent to US$75 million. The resources will be administered by the Deposit Protection Corporation (DPC). 

1533: Parliament, on its part has been allocated $7,2 billion. Farmers compensation: 2021 National Budget to allocate $2 billion to vulnerable farmers. 

1529: In recognition of the importance of peace, the security sector has to be adequately supported and hence, the 2021 Budget has made provision for essential requirements of security services such as training, accommodation, mobility, equipment, uniforms, medical facilities and other welfare essentials. Defence, Security and War Veterans, $23,8 billion; and Home Affairs and Cultural Heritage $23,6 billion. 

1527: Basic education: Minister Ncube says 2021 National Budget will fund for the acquisition of PPEs. $52 billion to go towards the Ministry of Primary Education. Herald




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