Saturday 9 December 2023


Tax proposals contained in the 2024 National Budget are designed to generate revenue for social programmes, infrastructure development and propel Zimbabwe towards achieving Vision 2030 goals.

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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