The 2022 National Budget sailed through Senate yesterday, two weeks after lawmakers had threatened to reject the Finance and Appropriation Bill arguing the government’s statement of expenses and income was “useless”.
Legislators and analysts were against the ZWL$927.6bn National Budget presented by Finance and Economic Development Minister, Mthuli Ncube last month arguing that it lacked any attempt to meaningfully resolve the country’s economic crisis.
After the Bill sailed through the National Assembly last week, it was inevitable that it would be passed by the upper house.
The governing Zanu PF controls both houses of Parliament and critics say the party’s whipping system could be used if lawmakers stepped out of line and failed to approve the 2022 National Budget.
Two weeks ago, Norton legislator Temba Mliswa said Parliament was going to reject the National Budget accusing chief whips for being 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.
The 2022 National Budget projects revenue of ZWL$850.8bn. The budget deficit will be ZWL$76.5bn to be financed from domestic resources and the liquidation of the special drawing rights.
Ncube projected that the economy would grow by 5.5% next year. He said a prudent fiscal policy complemented by a tight monetary policy was being pursued under the 2022 National Budget in consolidation of macro-economic stability.
This entails containing expenditure within budget, non-recourse to central bank financing, continuation of monetary targeting and improving the foreign currency auction system, he said.
Ncube increased the tax-free threshold to ZWL$25,000 from ZWL$10,000 effective January 1, 2022
Tax bands adjusted to end at ZWL$500 000, above which a marginal tax rate of 40% will apply, with effect from January 1, 2022. Tax-free threshold on income accruing in foreign currency increased to $100 from $70 with effect from next month.
Excise duty on cigarettes increased to 25% + US$5.00/1000 from 20% + US$5.00/1000 cigarettes to curb illicit flows and mobilise revenue. Local currency tax-free bonus threshold was increased to ZWL$100,000 from ZWL$25,000 from November 1. In US$, the tax free threshold is now US$700 from US$320.