Ncube piles more tax misery

ZIMBABWEANS should brace for more price hikes after Finance minister Mthuli Ncube increased excise duty on petrol and diesel as fundamentals pointed to a worsening economy despite token measures to contain expenses.

BY BLESSED MHLANGA /VENERANDA LANGA/FIDELITY MHLANGA

Finance minister Mthuli Ncube arrives at Parliament to present the 2019 budget yesterday

Excise duty on petrol and diesel will go up by 6,5 cents and seven cents respectively, while the duty on cigarettes will go up from $20 to $25 per 1 000 sticks.

Duty on vehicle imports will now be paid for in foreign currency, as Ncube sought to widen the foreign currency dragnet in his $8,2 billion budget.

Revenue collection is projected at $6,6 billion, while employment costs are seen gobbling $4,05 billion, with capital expenditure taking $2,02 billion, while a budget deficit of $1,57 billion is expected, from $2,8 billion this year.

Inflation is seen rising to 25,9% at year-end before sliding down to 5% next year, while the budget deficit is projected to reach $2,86 billion, 11,7% of gross domestic product (GDP), against a target of $793 million, but is seen falling to 5% in 2019.

Ncube told Parliament that the economy would grow by 4%, lower than the previous forecast of 6,3% after economic activity sharply contracted in the second half of the year.

The budget, which was themed Austerity for Prosperity, sees government chopping salaries for top civil servants, parastatal heads, commissioners, ministers and the President by 5%, saving $91,8 million on the wage bill.

With the majority of people bearing the brunt of tax increases, the measure is largely seen as tokenism.

Government will also retire civil servants aged 65 years and above and dismiss youth officers who are perceived as mainly “Zanu PF foot soldiers”.

Ncube also proposed introducing a biometric data system to capture civil servants to weed out ghost workers, who are often blamed for the excessive wage bill, while bonus payments will be based on basic salaries.

“The budget emphasises on living within means by instilling fiscal discipline and rationalising expenditures in order to create additional financial capacity for funding developmental expenditures and enhancing delivery of public services,” Ncube said.

The number of foreign missions will be cut, making savings of $50 million annually as part of measures to bringing the budget deficit to 5% next year.

Prices of motor vehicles and fuel are expected to shoot up following an upward review of duties levied in the new budget statement.

Second-hand car importers, excluding commercial vehicles, will now pay duty in hard currency, as opposed to using real time gross settlement and bond note.

The imports surged 69% between January and August this year to 45 368, from 26 781 in the same period in 2017, while chewing an average of $454,77 million in foreign currency annually, according to the Central Vehicle Registry.

“In order to redirect use of scarce foreign currency to the productive sectors of the economy, the budget proposes that customs duty and all other taxes on imported motor vehicles be levied in foreign currency acceptable as legal tender, with effect from November 23, 2018. This measure will, however, not apply on imports of commercial motor vehicles and vehicles for use by the physically-challenged,” he said.

Traffic law offenders will now pay fines of up to $700, up from $30 in an effort to deter road traffic offences.

“These traffic offences, which have contributed to the high levels of carnage, attract fines up to a maximum of level 3, with a monetary value of $30. In order to promote road safety culture by adhering to road traffic regulations, the budget proposes that any person who commits such offences be liable to fines of levels 8 to 10, which attract a maximum fine of $700 and imprisonment for a period not exceeding 12 months,” he said.

Government will also deploy the army onto the roads to help deal with traffic law offenders, according to Ncube.

Little relief has been offered to the public, with income tax threshold being increased from $300 to $350, while those earning above $20 000 will have to pay income tax of up to 45% down from 50% effective from January 1, 2019.

“In order to attract and retain skilled human capital and also cushion low-income taxpayers against rising prices of basic goods, the budget proposes to review the tax-free threshold from the current $300 to $350 and further widen the tax bands from $351 to $20 000, above which income is taxed at the highest marginal tax rate of 45%,” Ncube said.

The biggest chunk of the 2019 budget was allocated to the Primary and Secondary Education ministry ($1,132 billion), followed by Agriculture ($999,3 million), while Health was allocated $694 million when they bid for more than $1 billion.

Pharmacies will now be obliged to publish the maximum recommended retail prices agreed between manufacturers, wholesalers and retailers.

Ncube also allocated $310 million to kick-start the devolution process. As at end of August 2018, public debt stood at $17,69 billion and is likely to reach $18 billion by year-end.

“By end of 2018, it is estimated that the public debt statutory limit of 70% is likely to be breached. This underpins the urgency for containing our fiscal deficit,” he said.

Ncube proposed the privatisation of at least five public enterprises — namely TelOne, NetOne, Telecel, ZimPost and POSB and expects to raise $350 million from their sale.

24 Comments

  1. Prepared for the worst but still praying for the best..

  2. Government will also deploy the army on the roads to help deal with traffic law offenders???? How exactly will they help, by beating up the motorists or by shooting them.

  3. tendai chaminuka

    Government deploying the army to help deal with traffic offenders.Am I hearing correct.Are you saying soldiers will be writing dockets,tickets ko mapurisa haasi kugona.What kind of a state are you trying to create.VaNcube gadzirisai zveeconomy dont try to ride on people’s emotions.Accidents they are happening asi surely the army should not be seen to have been transformed in a police level.Inenge yatove Quasi Military

  4. Goes to show how ED is morphing into a five start dictator

  5. Ncube wenyu uyo akadhakwa

  6. Inga President Trump deployed the US Army to the border posts and when its Zimbabwe you want to make noise.

    1. dont compare USA and Zim you damp fool

    2. border posts not roads.

    3. benzi remunhu the army is already on the boarders ever since pre-independence

    4. KKKKKKKKKKKK wandi spaka off topic yako yakanyanya

    5. kkkkkkk wandi spaka off topic yako yakanyaya

  7. Austerity on the poor for Prosperity by the rich!

  8. Prof Ncube on point with the budget, we are fully behind him

    1. People of Zimbabwe are the biggest problem with Zimbabwe ..
      Just full of complaints and blah blah blah no action ..
      We are in so much debt as a nation to i.m.f etc and we must pay tax collectively to raise money to pull ourselves out of the mess that we are in ,

      We always look at the negatives and complain and talk and cry with no positive action ,…
      people in South Korea sold their personal gold to pay off their nations debt to the i.m.f , but we complain about a tax yet we buy lavish phones and import vehicles , we overcharge and profiteer off our brothers and sisters and demand payments in forex and hoard and panic buy as if we can purchase all the supplies to last us an infinity ?? …

      The government has employed technocrats who are actually trained for the positions they hold ..
      ( eg a prof in mathematical finance to be our minister of finance) , cutting down on gvt expenditure ,addressing the problem of forex dealers , etc they(government) are trying …
      there are no quick fixes for an economy ruined over a decade ..it takes time
      but we as Zimbabweans what are we doing to help our country …
      Zimbabwe is not ED’s or Ncube’s but it is for all of us as Zimbabweans ,lets work together for a better Zimbabwe !
      I would gladly pay more tax to help our country to better for our children !

      1. The problem we have is taxes have been misused by ZANU PF for the past 38 years. People die because they cannot get basic healthcare and ED pays millions to hire jets to galavant around the world. If your child succumbed due to a lack of basic medical care, you would change your tune.

      2. You are talking nonsense. Who ruined the economy you brainless wasp? The same people in charge now are part of the cabal that has ruined our lives. We have done a lot to help our country by telling your comrades that money does not grow on trees but they don’t listen. Now the country is broke and the people have been impoverished and this heartless junta is piling more taxes on already burdened people. Kan uchidya neZANU usauya pano kuzorutsa nonsense yako

  9. Little relief has been offered to the public, with income tax threshold being increased from $300 to $350, while those earning above $20 000 will have to pay income tax of up to 45% down from 50% effective from January 1, 2019.

    Relief???

  10. 2 months ago introduction of 2% tax.
    Yesterday fuel increases.
    Salaries are shrinking by the day.
    Import duty on cars now charged in forex.
    Heavier police fines on the roads.
    And the person who is always carrying this burden is the worker.”Proletariats of Zimbabwe, unite to halt this”

    We dont even need FDI to turnaround our economy. We need patriotic Zimbabweans, born, bred and educated here to mobilise resources to the benefit of everyone. And those sons and daughters are around, they are not even living in foreign countries. We are tired of being misled every day of our lives.

    Dear God please intervene to clear this mess.

  11. Here are a few facts.
    Zimbabwe is in short supply of forex.
    We cannot use that little available to import vehicles and trinkets.
    We cant tell those with forex what to buy but we can tax them in forex.
    We can then buy medicines instead of more vehicles.
    Most of Zimbabweans are in informal employment.
    They have not paid direct tax all these years till now.
    Now everyone contributes to development via the 2% transaction tax.
    If used correctly this will help reduce budget deficit. Give it a chance.
    We are going to have to go through a tough time before things get better.
    We need to demonstrate for things that improve our livelihood.
    Clean water, gabbage collection, good roads, medicines in hospitals, good schools with teachers that actually teach in normal school hours etc
    We need to focus on getting ourselves more gainfully employed instead of gossiping and arguing in combis and on social media.
    Our parliamentarians must stop acting like ECD children. Shameful.

    If this budget does not start fixing our problems when properly implemented then we are doomed. I don’t think anyone could have done much better. Armchair commentators included.

  12. What is new with the army ever since the coup why the army yep it is a military state thanks to brainless Ncube encouraging a Military state

  13. taxes were supposed to be issued on farm owners not continue burden the civilian and emerging private business owners instead leasing the land per hectare per quota to encourage production even in the mining sector all held claims to be charged per quota else lease for the benefit of the country.

    Defense forces allocation is too much but instead to encourage payback they are supposed to cut government expenditure on hiring security services by putting the excess army and police on day and night duty shifts on government and parastal premises

  14. Where is the funding going to come from? Surely we all know that taxes and gvt levies will not be enough to meet the projected expenditures in the budget.

  15. If they really wanted the support of everyone they would have removed bond notes. They keep it so Zanu PF can burn money at leisure

  16. PEOPLE WORRY SO MUCH ABOUT THE BUDGET TO SOME OF THE BUDGET HAS NOT BENEFITED THE MAJORITY OF ZIMBABWEAN BUT THE NON BENEFICIARIES CONTINUE TO BE HEAVILY TAXED.ZIMBABWEANS HAVE BEEN PAYING IN ONE WAY OR THE OTHER TAX ON ELECTRONIC TRANSFERS IS NOT A NEW THING VAT ETC considering government has not done much zvino vharana.Looking at the current budget its same zanoid farmers who cant meaningful utilise instead of giving them title deeds and lety them borrow commercially they get a very large chunk of the budget together with triger happy lot and Muturi the failed banker dished 6waya m to health which he tried to use to justify 2%/$.This government should stop being everything let companies source their own forex instead of these shady loans someone is getting by the way whats in it for him.South Africa invitef Zim to discuss possible help but noone approached them cause such help would public and boys madhiri Ianowa.Kungo tekisa kungo tekisa very soon you will have nothing to tax and that budget does not look and feel like your own other parties had a bigger say.good luck.

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