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Finance minister Mthuli Ncube


Finance minister hints at reversing 2024 tax horror



FINANCE minister Mthuli Ncube has hinted at tweaking proposals announced recently in the National Budget which were widely criticised as anti-people, as Treasury buckles to pressure from the public and business.


Ncube presented the 2024 National Budget statement last month which proposed the widening of the revenue base through several taxes and levies targeting both the rich and the poor. Immediately after announcing the measures, the Finance minister faced enormous criticism from different quarters saying the fiscal statement was not well-thought-out.

Economists, tax experts and business leaders on Thursday poked holes into Ncube’s ZW$58 trillion budget which, among a raft of measures, seeks to introduce a wealth tax on properties valued at US$100 000 and above; a levy on fizzy drinks, raising toll fees; tightening screws on the informal sector and new levies for lithium miners.

A panel of experts which included respected economists such James Wadi, Joseph Mverecha and Ernst & Young tax expert Shelton Kusotera red flagged the budget measures, saying most of them were inflationary and would push up the cost of living.

“I also ask the minister to consider the 70 years [cut-off] age. I retire at 61 where I belong so I think we then need to lower it to maybe 65 so that pensioners do not suffer the effects of the tax,” Kusotera said.

“Are we going to be covering old properties? Properties constructed in the 1960s, if there are such properties worth this amount, are we going to be taxing such properties if they belong to noted properties? How are you going to tax such properties if they are shared, how are we going to tax these properties if they have multiple purposes: residential and business? I think we then need to have those specific guidelines.”

George Guvamatanga, the ministry’s permanent secretary, set the tone for the looming changes when he told delegates attending a breakfast meeting organised by the Chamber of Mines of Zimbabwe, the Confederation of Zimbabwe Industries and audit firm Ernst & Young that the government is ready to make amends.

“I think the overarching issue here is that these proposals that have been presented for consideration and part of this process really allow us to refine the measures,” Guvamatanga said.

“Some of the measures are legal, some are technical, and others are political but eventually we need to review them and refine them so that they make sense.

“We have to quickly adjust some of the measures before the year ends as some will be effective on January 1 2024.The purpose is for us to refine the budget because the budget is for the people,” Guvamatanga said.

Ncube then stepped in, saying Treasury will consider post-budget submissions made by various constituencies. Commenting on the controversial wealth tax on properties following a paper presented by Kusotera, the Finance minister promised to effect some changes on the proposals.

“I’m always amazed by Zimbabweans, they say hatina mari ( we are broke),  but if you check each and every other family there is a child abroad at expensive schools. So we know that comprehensive wealth check so we just decided that what is simple and clean is let us just target house ownership,” he said.

“Again, we will be sensitive as we implement this . . . We have really taken that on board. Someone has got one house and that is their primary dwelling and they are paying an exorbitant amount on that. We are very sensitive to that and we are going to deal with that.

“(George) Guvamatanga will correct the zeros so when we say to the sugar people give us US$0.02 so that we create a cancer fund, what we are looking for as government is a cancer fund so that we can buy cancer equipment, it means we are pro-people. And the biggest part of the budget is going to the education sector, this means we are for the people,” Ncube said.
Ncube’s deputy, Kudakwashe Mnangagwa, defended the budget as pro-poor.
“When we sit down as the ministry, technocrats, bureaucrats, policymakers, it actually starts from the elderly persons,” Mnangagwa said.

“So, for example, when we look at the toll fees, we first look at what is the cost of roads. The amount of money that you save when you dont have to buy shocks as many times per year after changing tyres many times or involved in an accident, it’s so much than increase in toll fees.”

A day after the budget presentation, former Finance minister Tendai Biti blasted Ncube.

“Mthuli Ncube’s 2024 budget statement presented on Thursday is a shocking parody of fascism, extraction, dishonesty, incompetence and downright narcissism,” Biti said.

“The imposition of a massive array of taxes on a population mulcted by poverty and social challenges is reflective of this anti-citizen polity. The increase in tollgate charges, passport fees, duty on soft drinks, vehicle registration and fuel levy are narcissistic and unnecessary. The proposed government takeover of third party insurance is clearly unconstitutional and zany. The massive removal of VAT zero rating on all goods except exports and medicines will hurt the poor and elderly as will the removal of duty suspension on basic goods.”

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