FINANCE and Investment Promotion minister Mthuli Ncube will present a national budget sometime this month.
Every Zimbabwean is waiting with bated breath to see what is in store for business and ordinary people.
Zimbabweans are hoping it will not be like the 2023 national budget, which many said was anti-poor.
The message to Ncube, as he finalises the budget preparations, is to please give Zimbabweans a relief, for once.
Zimbabweans face exorbitant taxes.
The burden of high taxes in the country is taking a toll on various sectors of the economy and ordinary people, particularly those in the formal workforce.
With the upcoming budget, it is crucial for Ncube to propose measures to alleviate this burden. The most glaring issue is the heavy taxation on formally employed individuals.
The Pay As You Earn (PAYE) system is one of the primary sources of government revenue, but the high tax rates are squeezing the pockets of those who are already struggling with economic challenges.
- Budget dampens workers’ hopes
- Govt issues $24 billion Covid-19 guarantees
- Letter to my People:They have no answers for Nero’s charisma
- ZMX to enhance farm profitability
Keep Reading
It is imperative to reconsider the tax brackets and thresholds to provide some relief for formal employees. Raising the tax-free threshold is an immediate necessity, ensuring that basic livelihoods are not subjected to unnecessary financial constraints.
Another significant concern is the intermediated money transfer tax (IMTT), which places an additional financial burden on ordinary Zimbabweans for every transaction they make.
Ncube should not turn a deaf ear to appeals by business and labour to repeal the IMTT.
In November last year, Ncube cut IMTT on United States dollar transactions from 4% to 2%. It was further reduced to 1% in June this year.
The Zimbabwe Investment and Development Agency said in July: “The rate was reduced from 2% to 1%, a decision, which the Agency considers as a step towards the right direction. Lowering IMTT tax will positively impact ease of doing business in Zimbabwe and the Agency can only hope for the tax to be reduced to 0”.
The call from business in the past few weeks has been for government to scrap IMTT and reduce various taxes across sectors.
The IMTT has been a source of constant pain to an already overtaxed and overstretched consumer.
The Treasury has always been more focused on beefing up government’s war chest at the expense of millions of suffering Zimbabweans.
While the government sees the 1% IMTT as a cash cow, it has become an albatross around the necks of ordinary Zimbabweans, who are barely making ends meet — it has added an extra burden on the unravelling budgets.
The dramatic decline in living standards has turned the daily lives of most Zimbabweans into an unbearable pain.
These are bread and butter issues that need to be addressed.
When the tax was introduced, everyone thought it would be a stopgap measure for the government to improve its revenues before removing it.
Ncube should consider revising this tax to encourage financial inclusion.
Zimbabwe is also grappling with one of the highest tax burdens globally.
High taxes can deter businesses and entrepreneurs from investing and expanding in the country. The government should work towards creating a more conducive tax environment for businesses across various sectors.
Lowering corporate taxes, offering incentives for job creation, and simplifying tax compliance procedures can stimulate economic growth.
To foster trust and transparency in the tax system, it is essential for the government to allocate tax revenues efficiently and effectively.
Ensuring that taxpayers can see tangible improvements in public services, infrastructure, and social welfare programmes will go a long way in garnering support for the tax system.
The cost of living continues to spiral out of control. Prices of goods, including basic commodities, critical medical drugs and rentals have soared in the past months.
The macroeconomic situation remains volatile. It negatively affects livelihoods and access to food, especially among poor households.
This is compounded by the United States dollar being the preferred currency of trade.
We hope Ncube does not have plans to increase value added tax (VAT), another source of pain. Instead, he should reduce it.
It is crucial for the Finance minister to strike a balance between generating government revenue and providing relief to ordinary Zimbabweans, who bear the brunt of high taxes.
