Parly to reject 2022 budget

December 2, 2021

PHILLIMON MHLANGA

Zimbabwe’s lawmakers have threatened to reject the 2022 National Budget proposal saying the government’s statement of expenses and income was “useless”.

Several legislators want to reject the proposals when the Finance and Economic Development Minister, Mthuli Ncube takes it to Parliament for debate and possible endorsement.

Ncube last week presented a high sounding ZWL$927.6bn National Budget which analysts said lacked any attempt to meaningfully resolve the country’s economic crisis.

Norton legislator Temba Mliswa warned this week lawmakers would reject the budget.

“As Parliament , we have not done what we are supposed to do. Chief whips have been a big let-down in Parliament for whipping MPs to pass useless budgets.

To chief whips let me warn you, this time you are going to lose. We can no longer be kids any more. We are going to reject this budget this time. Tinotambiswa bhora risina mweya,” he said.

Chegutu East legislator, Webster Shamu said legislators have been shortchanged.

“The budget is in Zimbabwe Dollar but it’s going to be affected due to fluctuations.

I want Ncube to reconsider this. I also want to remind him that we spoke about legacy debts at our retreat in Victoria Falls.

But up to now nothing has been done,” Shamu said.

Southerton MP Peter Moyo also weighed in saying: “We will not pass this budget. It’s like a Mafia gang style.”

Senator, Chief Fortune Charumbira said the finance department was abusing them.

“We did not agree to cellphone levy in Victoria Falls and many other things. So, what were we doing in Victoria Falls (pre-budget conference). Tirikushandiswa [we are being used].”

MDC-T deputy president Thokozani Khupe also raised serious concerns.

“It is important that we speak the truth to power. It’s not true that the budgeted money is not being utilised. The truth is that the money is not released . Also development is not rocket science. Remove that $50 cellphone levy.”

The threat to reject the budget comes as analysts say the financial plan, which is 18.3% of GDP, does not instill hope to revive the economy.

Ncube said the US$50 cellphone levy will be refunded within 30 days if import duty had been paid.

Ncube did not remove the 2% tax on electronic transactions, introduced in 2018.

Analysts said the tax reduces companies’ competitiveness.

They also said though on the surface the Budget appears to be expansionary, yet it would be ravaged by inflation.

Apart from inflation, the economy is battling punitive taxes, shortage of foreign currency, crippling power cuts and a volatile exchange rate.

Ncube, analysts said, has failed to deal with perennial loss-making parastatals, which continue to drain fiscus through bailouts.

 

“Parliament must not accept this. Economy is very volatile. Budget allocation is also very worrying.

It’s worrying because it’s useless. There are no adequate measures to support economic stability. People’s lives are in shambles,” said economics professor Gift Mugano.

“On the US$50 cellphone levy, it’s against the digital pillar NDS1. The timing is wrong. It’s going to make life difficult for people.”

He said devolution funds have not been released to some districts despite the fact that it is a constitutional obligation.

University of Zimbabwe economics lecturer Nyasha Kaseke said the figures “do not make sense looking at the environment”.

 

Kaseke said the worry is that revenue is doubling every year, which is a sign of a total disaster.

“Even if we raise that revenue, are we going to meet the demand.

With employment, trade and profits nevertheless shrinking, opportunities to collect taxes are worrying,” Kaseke said.

“People earn in local currency but buy in forex. This is going to affect the government. For the next two years, the government is going to find it difficult.”

He said Ncube projected an increase in corporate tax due to corporate performance and parallel market pricing of goods and services which is an acceptance that the parallel market is going to rule in 2022.

Kaseke said unemployment was likely to remain high and most businesses remain fragile.

 

There will also be additional social spending in 2022, adding to the crisis, the economist said.

Taxation of the digital economy has been a hot topic since the crisis has accelerated the shift from face to face to online.

 

This has a negative effect on education as many will not be able to

afford a cellphone.

 

The government is going to increase domestic borrowing to boost revenue

especially for d e v e l o p m e n t a l projects, Kaseke said, warning that continuous borrowing from domestic sources over-crowds the private sector.

A disability rights activist, Kudzai Shava said President E m m e r s o n Mnangagwa had on June 9,2021 promised to establish a financial window to support people living with disabilities.

“We expected the budget to speak to this and provide funding to support what the President said.

 

We are concerned that the budget was silent on this promise,” Shava said.

“Unless the finance minister puts aside specifically targeted funding for PLWD to enable us to contribute towards economic growth, you will not achieve the 2030 vision of the country becoming an upper middle

income economy. SDGs speak of inclusive action.”

Shava added: “On the levy for cell phones, we access information through these gadgets.

This levy means the government is denying PLWD that right to information.

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