The Zimbabwe National Chamber of Commerce (ZNCC) says the mid term fiscal policy review should improve the investment environment of the country as the economy remains fragile.
Finance minister Tendai Biti is expected to present his mid-term fiscal policy mid July.
The fiscal policy is a statement on how the government uses its expenditure and revenue collection to influence the economy.
Addresing delegates at the ongoing ZNCC congress in Nyanga, former president Trust Chikohora said attraction of foreign direct investment into the country was one of key solutions to taking the country out of the current liquidity crisis.
“We cannot be overly optimistic regarding the mid-term fiscal policy review important as it is because there is little room for treasury to manoeuvre, hence an integrated macroeconomic recovery framework is key,” he said.
Chikohora said the country required substantial capital inflows to replace the aged machinery in factories, replace technologies and revamp infrastructure.
“The Budget can create conditions that improve industry competitiveness. Duties on raw materials and capital goods must be reviewed accordingly.
“Taxes on small businesses need a review to allow greater retention of resources for small medium enterprises growth. Large companies that subcontract small and medium enterprises (SMEs) must be entitled to a tax credit to enhance symbiosis between large corporates and SMEs,” Chikohora said.
He said the economic climate remained fragile adding any disturbance in the recovery process would be damaging.
He said the political situation has a huge bearing on the economic recovery of the country.
“Elections are a key issue that can spell out the way in which the economy is going to perform in the second half of the year,” said Chikohora.
He said if the elections were to be held they have to be conducted in a peaceful environment that would boost business confidence thereafter.