Highlights of Mthuli Ncube’s mid-term budget review


0

Zimbabwe Finance Minister Mthuli Ncube has trimmed his economic growth forecast for 2022 to 4.6% from his previous 5.5%, citing “the impact of the external global environment as well as our own unique circumstances”.

Ncube presented his Mid-Term Budget Review statement to Parliament yesterday.

He announced a raft of measures to increase revenues, and this includes new taxes on mines and tougher action against tax dodgers.

Here are some highlights:

Supplementary budget

Reflecting the impact of inflation on the budget, Ncube announced a supplementary budget, proposing additional spending of $929 billion. Of this extra money, 53% is going towards salaries, while 19% will go to capital projects.

In the first six months of the year, the government collected revenue of $506.6 billion and spent Z$534.5 billion. This left a budget deficit of $27.9 billion, against a target deficit of $45 billion.

Tax relief measures

People earning $600 000 per year, or $50 000 per month, will no longer pay tax. This is up from the previous $300 000 threshold. Tax bands now end at $12 million from $6 000 000 per annum. Above this, tax will be 40%. This is with effect from 1 August. The Zimdollar tax-free bonus threshold is up from $100 000 to $500 000 from November.

The 2% tax on electronic money transfers will now apply only to transactions above Z$2 500, up from the previous $1 000. For companies, the maximum tax payable per transaction is up from $1 320 000 to Z$3 300 000 on transactions above Z$165 million.

Raising revenue

Ncube wants more taxes from miners and tougher action on tax avoiders.

Mining royalties

Ncube says mines are contributing just 1.2% of GDP in direct taxes, which he says is lower than the regional average of 2%.

Platinum miners, for example, pay 2.5%, after a court case that cut the royalty from 10% in 2015. In comparison, gold miners pay royalties of up to 5%. Ncube is, therefore, increasing royalties for platinum miners to 5%. Lithium producers will also pay a 5% royalty, starting in January.

Continued next page

(97 VIEWS)

Don't be shellfish... Please SHARETweet about this on Twitter
Twitter
Share on Facebook
Facebook
Share on LinkedIn
Linkedin
Email this to someone
email
Print this page
Print

Like it? Share with your friends!

0
Charles Rukuni
The Insider is a political and business bulletin about Zimbabwe, edited by Charles Rukuni. Founded in 1990, it was a printed 12-page subscription only newsletter until 2003 when Zimbabwe's hyper-inflation made it impossible to continue printing.

0 Comments

Your email address will not be published.