Biti sees the light at last

Finance Minister Tendai Biti has finally seen the light. Zimbabwe is on its own. The billions that were being dangled at the country if it found a political solution are nowhere to be seen. The money is, ostensibly, still there. But it cannot be disbursed because the country has not yet found a political solution. Mugabe is still there. And he is the problem.

There are no signs that President Robert Mugabe who has been in power since independence in 1980 will leave any time soon. Biti has already been in office for a year. Elections are a year away, if they are going to be held next year, or three years away if the inclusive government lasts the current parliament’s full term- which is most likely.

It is now obvious that there is no way the country can ever hope to get the $10 billion that it said it needed to rebuild its economy. It can’t even raise $810 million to finance this year’s budget deficit.

“It’s very unlikely that donors will fill that $810-million gap,” Biti acknowledged. “We’re on our own. Last year we got $35-million – $30-million from South Africa and $5-million from China. 2010 is going to be worse, we have to mobilise our own resources.”

The Herald quoted him as saying: “If people think that there is anyone from outside who would give us money, that’s a dream. We are on our own, and all this money will have to come from Zimbabwe. We have to mobilise resources from our minerals such as from Chiadzwa.”

That is the right attitude. What is needed is action, not just talk. One critic who has always been against aid, said he was glad Biti had finally seen the light. “Our politicians must understand that hakuna munhu anovaka musha owumwe,” the critic said, meaning, our politicians must understand that there is no one who will build another person’s home. No one will develop Zimbabwe except Zimbabweans themselves.

The critic said the first thing Biti should do is to look at what the country has and how it can use that to generate revenue.

Let’s start with toll gates. They are generating revenue. Where is this revenue going? Is all the money that is being paid by motorists getting into the treasury?

Biti said the government had raised $5.5 million in toll fees from August to November 30. This was more than half the budget for the department of roads for 2010 which was put at $8.6 million. With an average of $1.3 million a month, toll fees should have clocked nearly $10 million by end of February. So we must see some action on the roads. We could start with potholes.

Second let’s look at the Zimbabwe Revenue Authority (Zimra). There is a plethora of things to look at. Let’s start with cross border travellers. If one takes a bus from Johannesburg there is always someone who collects money from passengers to bribe Zimra officials at the Beitbridge border post. All it takes is to get someone from the anti-corruption commission or the Ministry of Finance itself to take a ride, track that person and see who he gives the money.

The official should also make sure that everyone on the bus pays duty because the reason why passengers bribe Zimra officials is to avoid paying duty.

Next look at the used cars that are coming into the country. Is every importer paying the right amount of duty? This is a cash cow because the number of cars being imported into the country does not show at all that this is a country in crisis.

One can even track all the cars that were imported and check whether they paid the right duty. This is very easy because the records are there since each car has to get a new registration certificate. And one does not have to leave one’s desk as this can be done on a computer.

One of the major benefits of the inclusive government is that supermarket shelves are full once again. Are the shopowners paying duty for all products that are not duty free? Are the shops paying value added tax on their sales? This is also easy to monitor.

Then there is business. Are companies paying their taxes? Last year, Biti said tax from the corporate sector was only 4 percent of total revenue. Is this the right percentage? A study on how countries are losing money to corporates through mispricing showed that Zimbabwe was losing 31.5 percent of its revenue through this way, the highest in the world.

The study showed that the country had lost $225 million between 2002 and 2006 when the country was in the midst of an economic crisis. Perhaps Biti could look at ways of recovering this lost revenue because it is enough to finance the budgets of 10 ministries in the current budget: – the Office of the President and Cabinet, the Prime Minister’s Office, Parliament, Ministry of Public Service, Ministry of Defence, Ministry of Industry and Commerce, Ministry of Mines, Ministry of Environment and Natural Resources, Ministry of Media and Information and the Ministry of Energy and Power Development.

If one targeted the ministries with the smaller budgets, the amount would finance 25 out of the 37 votes. Biti knows this problem as he stated in his 2010 budget speech that his ministry is working on legislation to curb transfer pricing by corporates. What is now needed is action. What has he done about this so far?

Biti also ought to look at why most companies are in business if they are not profitable. A study that The Insider carried out in the late 1990s with an officer from the auditor-general’s office showed that only 11 000 companies out of a registered 35 000 were paying taxes. Has this changed? If not why are all these companies in business?

The next thing would be to look at ministries that are collecting revenue. Is all the revenue going to government? A high ranking government official told The Insider that apart from the Ministry of Finance, headed by Biti, all other ministries that are in a position to collect revenue in one way or another are under ZANU-PF. We are talking about ministries that charge for permits, levies, licences and so on? Is this revenue going to treasury?

Biti could also look at the extractive industries, especially the mining companies. Are they reporting all their sales? We are looking mainly at gold, diamonds and platinum. Are they paying taxes on their revenue?

There have always been whispers that gold production in Zimbabwe never really went down. It was just that less and less was delivered to the official channel, the Reserve Bank of Zimbabwe, because it was not paying producers anyway. The remainder was simply being smuggled out of the country. It could all be rumour, but as they say, there is no smoke without fire.

Lastly, when everything else has been done, Biti can then look at his own colleagues in cabinet and government. Are they paying their taxes, especially those that are in business? If they claim they have no money, he must find out how they manage to send their children overseas? Who is paying for their upkeep? Could they be abusing public funds?

And of course that will also be a unique opportunity to check whether all those people who received government grants for their tertiary education have paid back.

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