The proposals, while seeking to raise resources to fund
development, are also aimed at striking a balance between generating income and
fostering a conducive business environment.
Speaking exclusively to The Sunday Mail on his Budget
proposals, Finance, Economic Development and Investment Promotion Minister
Professor Mthuli Ncube said the proposed taxes will “bolster domestic resource
mobilisation” necessary for financing economic development.
While some sections of society had raised concerns over the
proposed taxes, the minister said there remained room to input changes to
ensure the budget has national by-in.
Parliamentary portfolio committees will start post-budget
meetings tomorrow.
The meetings are convened to scrutinise the budget and
ensure its alignment with the needs of the people and the country’s development
goals.
They play a crucial role in promoting transparency,
accountability and effective resource allocation.
Said Minister Ncube: “The 2024 budget seeks to bolster
domestic resource mobilisation, which is necessary for financing economic
development going forward for Zimbabwe to achieve Vision 2030.
“The budget also seeks to support various social groups,
especially the poor.
“For example, we have a sizeable budget that is going to go
towards the Pfumvudza/Intwasa programme, which is a productive social
protection programme.”
The taxes, he said, are also meant to support expenditure
towards the health and education sectors.
“These are critical sectors to support within our economy.
“We also want to support various social protection
programmes.
“All of this requires resources and they are pro-poor
interventions.”
He said the “wealth tax” outlined in the budget seeks to
raise funding for development of infrastructure in urban centres, particularly
water, sanitation and roads.
The wealth tax proposal seeks to impose a one percent tax
on residential properties valued above US$100 000.
The tax is expected to apply to the market value of
residential properties, excluding any mortgages or other encumbrances.
Minister Ncube proposed that the tax be payable monthly,
quarterly or annually, at the taxpayer’s discretion.
“Let me start with the one percent wealth tax. This tax,
apart from trying to seek some form of redistribution of wealth, given that we
have such inequality, will also raise resources that will go towards developing
specific urban infrastructure such as the sewer systems in our urban areas.
“We currently have a challenge with (potable) water in our
urban areas . . . that will be dealt with and road maintenance as well will be
covered through that wealth tax.”
He said his proposals will be subject to rigorous debate in
Parliament.
“Of course, we will debate (the budget) in Parliament. We
have been listening to the public in terms of (the proposed tax) thresholds. We
are going to fix that.
“But also we are aware that we do not have a limitless tax.
So, a cap will also be introduced so that even those who perhaps own expensive
houses are not overly taxed.”
Prof Ncube added that resources were required for
development and rehabilitation of major trunk roads, hence his proposal to
raise toll fees.
“We need additional resources as Government to build more
roads, to maintain the current roads and make sure they stay in a good
condition,” he continued.
“This will ensure they improve connectivity and
transportation across the country and support the ease of doing business in
terms of (facilitating) access.
“So, the toll fees will go a long way towards this.”
He said resources raised from the proposed sugar levy will
be directed towards creating a National Cancer Fund.
The proposal seeks to impose a US$0,02 tax per every gramme
of sugar contained in local beverages, with effect from January 1, 2024.
“We also have introduced a levy on sugary beverages to make
sure that we can create a cancer fund.
“What we have had in the last few years is a sharp increase
in cancer incidences on the non-communicable diseases front.
“So, we want to make sure there is a dedicated fund to
support diagnostic processes, and for us to acquire cancer equipment and
drugs.”
In the budget, Prof Ncube also announced that the US$300
Covid-19 allowance for public sector workers would be consolidated into their
pensionable salaries, effective January 1, 2024.
Commenting on that proposal, he said: “So now, civil
servants will have a full decent salary, which is pensionable.
“But, of course, it might have the downside of taxation,
but it is normal for any salary to be taxed.
“What we have done is that we have increased the tax
threshold as part of the relief measures for citizens, so that will also
contribute towards providing relief on the civil servants’ salaries.”
Minister Ncube also said other measures such as taxation of
micro and small enterprises were meant to ensure they comply with tax
regulations and facilitation the enterprises’ regularisation.
Economist and member of the Reserve Bank of Zimbabwe
Monetary Policy Committee, Mr Persistence Gwanyanya, said the revenue-enhancing
measures were noble.
“The US$0,02 levy on every gramme of sugar in beverages is
mainly meant to support the procurement of cancer equipment at a time citizens
had expressed concerns about the unavailability of cancer-screening equipment
in the country,” he said.
“Although seemingly painful, the increase in toll fees and
passport fees is meant to support urban infrastructure development at a time
the fiscus is severely constrained.
“The wealth tax, which is one percent of residential
properties, recognises the disparity in wealth distribution.
“The conversion of the Covid-19 and hardship allowance of
US$300 into pensionable allowance for the civil servants will go a long way in
supporting the welfare of this constituency.” Sunday Mail
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