FINANCE minister Mthuli Ncube has said he will present his maiden budget statement on November 22, in what will be a litmus test of how he will address Zimbabwe’s economic crisis.
BY FIDELITY MHLANGA
Shortages of basic commodities, hard currency and falling purchasing power of wages are among some of the challenges facing the southern African country.
“It (the budget presentation) is on November 22,” Ncube told NewsDay on Monday.
Confederation of Zimbabwe Retailers principal economist Clemence Machadu said the 2% tax on electronic transactions should be set aside as it is adding insult to injury on people already failing to cope with their diminishing disposable incomes.
“Policymakers should really address the core issues in the economy. Folks really want bread and butter issues to be addressed, partially through reviewing the unsustainable cost of living through stabilisation of the price system and goods market,” he said.
Ncube promulgated the 2% tax last month before amending and confining it to apply on transactions of $10 and above, before putting the cap at $10 000 on the amount of tax to be paid. This implies that transfers above $500 000 will attract a flat tax of $10 000.
He also exempted intra-company transfers as well as transfers of salaries, tax payments, foreign currency-related payments and transfer of funds by the government.
In his latest weekly column in the State media, President Emmerson Mnangagwa hinted new measures would be announced to review the tax.
Zimbabwe Chamber of Commerce chief executive Christopher Mugaga said the Finance minister must proffer lasting solutions to pressing issues affecting the economy.
“The minister is sitting on a fiscal cliff edge. He is dealing with a budget that has the capacity to raise uncertainty profile. He should handle it with caution. He must not prevaricate or dilly dally. He must face the challenge head-on. We are waiting to see if he is going to announce a US dollar or RTGS (real time gross settlement) balance budget. It’s a tough choice for him to make,” Mugaga said.
The central bank last month de-dollarised by way of separating Nostro foreign currency accounts and RTGS bank balances code-named FCA RTGS.
Mugaga said the budget should also come up with realistic measures as to how government intends to cut fiscal deficit in relation to Gross Domestic Product by 3,1% in 2019, 3,5% in 2020 and 5,2% by year 2021 as ensconced in the budget strategy paper.
Confederation of Zimbabwe Industries president, Sifelani Jabangwe said the manufacturing sector was pushing for adequate forex payment.
“The major submission is forex and currency management; that is our major concern. We yearn to get $200 million forex per month as industry,” he said.
Another important issue, according to Jabangwe, is the reduction of trade deficit which stood at $1,8 billion after imports shot up to $5,5 billion against exports valued at $3,7 billion.
“We are pushing that the Statutory Instrument 122 won’t go beyond 2018. That will give local industry room to grow,” he said.