The Sunday News
Judith Phiri, Business Reporter
THE Minister of Finance and Economic Development, Professor Mthuli Ncube, on Thursday announced a ZWL900 billion supplementary budget which will see a huge chunk going towards employment costs.
Prof Ncube noted that fiscal developments during the first half of the year, characterised by increasing revenues and expenditure pressures, necessitated the revision of the approved 2022 National Budget.
Prof Ncube said the bulk of the Supplementary Budget (53 percent) was going towards employment costs to cushion public servants against increasing cost of living. “The balance of the additional resources are going towards meeting Government consumables (18 percent), capital projects (19 percent) and social benefits (seven percent). Government remains committed to addressing the welfare of civil servants in a fiscally sustainable manner.”
Prof Ncube said the additional resources were being distributed to line Ministries, with the revised 2022 National Budget, Ministries of Lands, Agriculture, Fisheries, Water and Rural Development and Primary and Secondary Education topping the list with an additional ZWL$100.7 billion and ZWL$103.9 billion, respectively. He said on agriculture, the resources were earmarked for grain procurement, preparations for the forthcoming season and dam construction.
“For the rest of the Votes, the additional funding is meant to meet increased operational costs, the wage bill and identified projects and programmes,” added the Minister. Prof Ncube said the proposed revenue measures which sought to enhance revenue to the Fiscus, provide relief to taxpayers, as well as strengthen tax administration.
In terms of platinum royalty rate, he said proposed a royalty rate of five percent effective 1 January 2023, which was in line with other platinum producing countries in Africa.
“Mr Speaker Sir, despite the significant contribution to output and export receipts, the mining sector contributed about 1.2 percent of GDP in direct taxes to the Fiscus in 2021. This is a significant contrast to countries in sub-Saharan Africa which averaged 2 percent during the same period.”
“Low fiscal receipts are attributed in part to a generous royalty regime on some major minerals. A case in point is the royalty rate on platinum, which was reduced from 10 percent in 2015 to 2.5 percent in conformity with a court judgement. The reduced rate was subsequently aligned across all platinum producers,” added the Minister.
Prof Ncube said compared to revenues accruing from mining activities and rates charged on other precious minerals and metals such as gold, the royalty rate on platinum was sub-optimum.
