Call for pro-poor budget
LIVINGSTONE MARUFU
Multiple analysts have urged Treasury to deliver a a pro-poor budget that offers safety nets to the vulnerable and lower taxes on a variety of income related expenses to boost aggregate demand, promote business growth and attract investment.
Mthuli Ncube, the minister of finance, economic development, and investment promotion, is anticipated to deliver the national budget for 2024 this month.
The Zimbabwe National Chamber of Commerce (ZNCC) said in its submissions to the Treasury that the government ought to assist the businesses and the general public that have suffered over time.
“The upcoming 2024 National Budget Statement should be aligned to sustainable revival of the economy and employment creation through well-targeted tax incentives and higher spending on, or allocation to productive sectors of the economy, increased social spending that meets international protocols and towards achieving Vision 2030 and Sustainable Development Goals, while keeping a close eye on fiscal consolidation; and promotion of private sector participation in Zimbabwe’s economic recovery agenda through devolution and other means in line with National Development Strategy (NDS)1,” ZNCC said.
It continued: “There is a huge disparity in the tax-free threshold in Zimbabwe dollar and United States dollar terms. Zimbabwe dollar earners are being prejudiced and the tax policy thus lacks fairness which is one of its basic principles. The authorities should increase the tax-free threshold in Zimbabwe dollar to allow earners to spend more,” ZNCC said.
Kurai Matsheza, president of the Confederation of Zimbabwe Industries (CZI), another business lobby group, told Business Times that the Treasury ought to devise laws that safeguard the weak and foster an atmosphere that is favorable to business.
“We humbly submitted that the minister should reduce various tax heads and unnecessary regulations to allow businesses to operate as well as encourage informal businesses to register. This will reduce the cost of production and reduce prices on products hence helping consumers to buy affordable products,” Matsheza said.
He added: “ We also want the government to provide safety nets to the vulnerable and increase social spending to boost aggregate demand and stimulate economic growth.”
Ncube predicted that revenue collections would total ZWL$44,1 trillion in 2020 compared to ZWL$47.8 trillion in expenses.
Nevertheless, the government has to pay for unforeseen costs. Cyclones Idai in 2019, the Covid-19 pandemic in 2020, and recent droughts serve as examples of the detrimental effects of unforeseen shocks, compelling the Treasury to set aside a contingency fund to pay for the unforeseen and unseen.
El Niño weather phenomenon and ongoing geopolitical tensions are expected to have a major impact on the economy, causing growth to slow down to 3,6% in 2024 from the projected 5,2% in 2023.
