Cash-strapped Mthuli Ncube delivers ZWL58,2 trillion budget, deepens tax measures

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By Alois Vinga

SCARCE resources have forced Finance and Investment Promotion Minister, Mthuli Ncube to deliver a ZWL58,2 trillion 2024 National Budget while deepening tax measures to salvage the dry public purse.

Premised on the theme, “Consolidating Economic Transformation” the Treasury boss said the blueprint follows widespread proposals and suggestions from consultations with Parliamentarians, MDAS, business, labour, academia, civil society, youth, women, small-scale entrepreneurs and miners among others.

He said the submitted funding requirements (bids) hit ZWL$110 trillion, against the available Z$58,2 trillion.

“The envelope is limited by the sustainable revenue to GDP ratio of about 18% which has been allocated to MDAs as indicated,” he said.

The budget saw Welfare-related Ministries getting the lucrative allocations with the Primary and Secondary Education Ministry pocketing ZW$8 trillion, Higher Education ZW$2,3 trillion, Public Service ZW$2,3 trillion and Health and Child Care receiving ZW$6,3 trillion.

The Land and Agriculture Ministry received ZW$4,2 trillion.

In the second tier recipients of the most lucrative allocations were Security Ministries in a development which saw the Defence Ministry pocketing a whooping ZW$3,6 trillion, the Home Affairs Ministry pocketing ZW$3,9 trillion and the Office of President and Cabinet pocketing ZWL2,1 trillion.

“The fiscal policy thrust for the 2024 National Budget is guided by the need to maintain a sustainable budget deficit within the SADC macroeconomic convergence threshold of not more than 3% of GDP.

“Going into 2024, the Government seeks to consolidate and entrench the stability to facilitate economic transformation and preserve disposable incomes,” said Ncube.

The Treasury boss also widened the fiscal space to the extent of going after the US$300 allowances paid to Civil Servants after subjecting them to pensionable emoluments across the board, effective January 2024.

Despite ravaging inflation, Ncube would not let go of the Income Tax revenue category after setting a tax-free threshold of just ZWL$750 000 per month which is just close to around US$150 on the official market and slightly below US$100 on the parallel market.

He also reviewed the tax-exempt threshold on withholding tax on agricultural commodities that include soya beans, sunflower, groundnuts and cotton seed from US$1 000 per annum to US$5 000 or local currency equivalent.

Ncube also increased tax on high-value vehicles from the current 30% up to 50% for vehicles ranging between US$300 000 and US$700 000.

He reviewed the Strategic Reserve Levy by US$0.03 and US$0.05 per litre of diesel and petrol, respectively, with effect from 1 January 2024.

“Toll Fees are currently pegged between US$2 and US$10, depending on the type of vehicle. 147. I, therefore, propose an upward review of Toll Fees on premium roads, that is, Harare-Beitbridge and Plumtree-Mutare and other roads, with effect from 1 January 2024,” he said.

Ncube also introduced a levy of US$0.02 per gram of sugar contained in beverages, excluding water, with effect from 1 January 2024.

In 2024, annual inflation is anticipated to end the year ranging between 10% to 20%, reflecting continued tight monetary and fiscal policies with economic growth projected at 3,5%.