Zimbabwe devalues currency, raises tax free threshold

SUPPLEMENTARY BUDGET: Mumbengegwi arrives in Parliament Thursday

• Zimbabwe's inflation rockets to 7 634%

• RBZ unveils $200,000 dollar bill

• Gary Rusike: Should Zimbabwe adopt the rand?

• Zimbabwe mulls inflation data blackout

• SADC denies Zimbabwe rescue plan

• Rand to shore up Zimbabwe dollar?

• Zim imposes price freeze on all goods, services

• Chaos in Zimbabwe price stand-off

• Biti: Indigenisation Bill another platform to loot

• Government order on prices ignored

• Zimbabwe orders prices to be slashed by half

• Tax-free threshold raised to $1,5 million

• Mutambara: An economic vision for Zimbabwe

• Zimbabwe's currency crashes

• Zimbabwe forecasts inflation fall

• Zimbabwe's inflation races to 3714 percent

• Devaluation by another name

By Lebo Nkatazo

ZIMBABWE on Thursday devalued the local currency from $250 to $30 000 against the US dollar in a $37 trillion supplementary budget that failed to address funding requests by various ministries that submitted bids amounting to $250 trillion.

Figures tabled by Finance Minister Samuel Mumbengegwi show that Zimbabwe will incur a budget deficit of $11 trillion.

The original 2007 budget deficit projection by former Finance Minister Herbert Murerwa was $4 trillion.

Mumbengegwi also traised the tax free threshold for the country's suffering workers.

“Of the $37,1 trillion total allocation to year end, 425,5 trillion is for recurrent expenditure, while the balance of $11,6 trillion for capital expenditure constitutes 31 percent of the supplementary budget,” the finance minister said.

The minister also allocated $36 billion to the National Incomes and Pricing Commission that is mandated to approve or turn down any requests for price hikes by businesses.

The minister also dished out $1,4 trillion for the restoration of water supplies in Harare, Bulawayo, Marondera and Beitbridge.

“In the prevailing inflationary environment, an increasing number of taxpayers are now being pushed into high income tax brackets…I, therefore propose to adjust the tax-free threshold to $4 million per month and also widen the tax bands to end at $70 million per month, above which income is taxed at 47,5 percent," Mumbengegwi said.

The minister also allocated $735 billion for next year’s elections and $347 billion for food. He said 600 000 households need food aid.

He said he would also broaden the list of luxury goods that attract duty in foreign currency.

JOIN THE DEBATE ON THIS ARTICLE ON THE NEWZIMBABWE.COM FORUMS
newsdesk@newzimbabwe.com