The Sunday News
Gabriel Masvora, News Editor
IT has always been a chorus especially among doomsayers and those in the opposition trenches that the Government is not doing enough to fund projects that contribute to economic growth.
What some of these pessimists, tactically hide or never bother to mention is that for Government to be able to provide all these services, it needs money. World over, the most notable ways for Government to raise money is through taxes. In the case of Zimbabwe, in the yesteryears, when the industrial base was still intact and had not been decimated by Western-imposed sanctions, companies and their employees were the major contributors to Government revenue.
However, with companies closing and thousands of workers losing their formal employment, it became a big ask for the Government to continue relying on taxes from companies and workers to finance the huge chunk of its budget. In fact, it had become a huge burden to the few workers who were left in the formal sector to carry the cross for everyone by continuously being the only “loyal” tax payers.
Most of the workers who lost formal employment went into the informal sector but the country had no systems to ensure that it taps into this growing sector. Numerous calls to ensure that those in the informal sector come to the party and contribute to the fiscus for the good of their country were often resisted or met with deafening responses.
It is with a huge heart that we bow to efforts enunciated in the 2021 National Budget that was announced by Finance and Economic Development Minister Professor Mthuli Ncube on Thursday last week which seeks to increase revenue streams into the Government purse.
What is encouraging is that from the measures put in place, it is no longer an “us and theirs” affair but everyone’s baby.
Prof Ncube announced a raft of revenue collection measures that if properly followed will improve the coffers of the country.
To mention a few, Prof Ncube announced that the continuation of the two percent tax on mobile money and other electronic transfers stays. He just shifted the minimum transaction base where the tax that does not apply to $500.
For foreign currency transactions, the tax will apply above US$5. While some have argued that this tax was hitting the poor, it is one of the best ways to ensure that everyone in the country contributes to the fiscus. The issue of being rich or poor does not apply much as the amount you are taxed only depends on the amount transacted.
Another revenue stream which has been put in place is that of making sure that tenants pay the presumptive tax. If you are a landlord, you must ensure that your tenant pay this tax or the axe will fall on you and you will liable to pay a penalty equivalent to the amount of tax payable – plus interest.
Those running small businesses and stalls will also be contributing to ‘Caesar’. People running small stalls will now be required to pay US$30 per month for a unit. If you run a hair salon, you now pay $2 500 per month. A restaurant or bottle store is now required to pay $10 000 per month in taxes.
Selected professionals have also been singled out to pay tax. Doctors, engineers or lawyers who run their own entities will also be required to pay $500 000 in presumptive tax, while architects will pay $250 000 and realtors will pay $1 million per month.
Another revenue stream that was announced concerns drinkers and smokers. Excise duty on cigarettes which was pegged at $100 per 1 000 cigarettes plus 20 percent of the ex-factory price will now go up to the equivalent of US$5 per 1 000 cigarettes plus 20 percent of the ex-factory price.
Those with foreign currency can now also pay tollgates in US dollars with small cars paying US$2, US$3 for minibuses, US$4 for buses and US$10 for haulage trucks. In the fuel sector, the Government announced that Excise duty on diesel will go up by US$0.05 to match the petrol duty. A petroleum import duty of US$0.05 will also now be added to fuel imports that come into the country by road.
These are just a few of the numerous other revenues tapping methods announced in the budget. While paying tax has never been a favourite topic for many people and companies, it is a necessity which will ensure that broadly the wheels of the economy can be oiled. Once they are running smoothly, some of these taxes will even fall away but more importantly everyone will benefit.
Hence, we hope with every cent trickling into the Treasury, this will only result in the improvement of execution of developmental projects across the country.
