BUSINESS WRITER
Finance Minister Mthuli Ncube today presents his 2020 National Budget amid competing interests and fears that revenue will underperform. Save for local taxes, whose values will naturally swell with inflation but remain low in hard currency terms, raising funds will be a mammoth task for Ncube.
Unemployment levels continue to grow as corporates shut down or downsize, Old Mutual being among the recent casualties, while mineral revenues are seen dropping due to power challenges and forex shortages.
A recent RBZ report indicated foreign receipts went down 9 percent for the nine months of 2019, due to underperformance of key drivers.
Labour is particularly watching if Ncube will put more weight on an overtaxed workforce by introducing more taxes and levies while corporates who are struggling with rising costs of utilities, fuel for generators and pressure to provide a living wage in a highly inflationary environment are also monitoring closely.
Industry, through the Zimbabwe National Chamber of Commerce (ZNCC), said government must review the tax-free threshold from the current ZWL$10 to ZW$20 and the maximum tax payable per transaction by corporates from the current ZWL$10 000 to ZW$15 000 for transactions with value exceeding ZWL$750 000.
ZNCC said Ncube should remove the 2% intermediated transfer tax given that currently transfers of money between related companies (group companies) is charged the tax.
“There is no analysis of the type of the transactions that should attract the tax and those that should not. Some of the scenarios that emerge that result in double taxation are quite concerning,” ZNCC said.
There is also concern from the public, World Bank and potential investors that the cost of registering property transfers in Zimbabwe is too high compared to other countries in the region Whatever Ncube is able to collect, key area such as Defence and Home Affairs put in bids that far outweigh estimated revenues.
This is not even including critical demands in health, education and other social services. Infrastructure requires a lot of spending given the country has a huge infrastructure gap which is hampering business.
For instance, the country needs to invest in the dualisation of the Harare-Beitbridge Highway, Harare-Chirundu Highway and Harare-Nyamapanda highway.
