Highlights of Mthuli Ncube’s mid-term budget review

Going after tax dodgers

Ncube says people that owe ZIMRA are avoiding having their accounts garnished by simply moving their money to other accounts. Attaching their property to recover tax needs a court order, which takes too long.

He, therefore, proposes that businesses that owe ZIMRA be shut down temporarily until they pay up. “This process will only be initiated after issuance of the required statutory notices by ZIMRA.”

While the VAT Act provides for penalties for those who don’t pay taxes, it is still not an offence to dodge tax. Mthuli wants this changed. “I, therefore, propose to criminalise non-payment of tax and also to provide a penalty thereof.”

As at 30 June 2022, ZIMRA was owed $23.05 billion in unpaid taxes.

Currently, a company that earns the equivalent of US$60 000 annually is required to register for VAT. Ncube is lowering this to the equivalent of US$40 000 “in the interest of revenue (and) to maintain a stable tax base”. This means smaller businesses will be made to pay more tax, starting September.

Imports and Exports

Zimbabwe’s exports rose 33% to US$3.5 billion while imports grew 15% to US$3.7 billion in the first six months of 2022. Exports are expected to reach US$7.3 billion this year, driven by stronger commodity prices plus agriculture and manufactured exports.

Debt burden

Zimbabwe’s external debt is now US$13.2 billion. Mthuli says: “The country’s external debt continues to burden the economy by restricting access to low cost, long-term financing required to support the desired medium to long term growth trajectory”

Mthuli Ncube says Zimbabwe is to soon host a debt forum with Development Partners and other stakeholders “aimed at building consensus among all stakeholders”.

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