Mid-term fiscal policy review highlights

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FINANCE minister Patrick Chinamasa on Thursday announced the 2014 Mid Term Fiscal Policy which reflected an underperforming economy on the back of weakening commodity prices and lack of investment. Below are some of the highlights of the policy statement:

Fringe benefits such as housing and fuel allowance to be taxed.
GDP growth still seen at 3,1 percent.
Mining sector to register a negative 1,9 percent growth from initial projection of 10,7 percent due to weakening commodity prices.
Excise duty on diesel and petrol to go up from 25 cents and 30 cents per litre to 30 cents and 35 cents per litre, respectively, with effect from September 15, 2014.
Customs duty for single cab vehicles weighing up to 1,400kg to 40 percent from 20 percent. Passenger motor vehicles of engine capacity below 1,500cc to charged 40 percent duty from 25 percent. This is with effect from November 1 2014.
Mobile phone credit subject to five percent excise duty.
Cellphone handset import duty at 25 percent.
Total exports for the six months to June declined to $1,2 billion from $1,5 billion last year.
Imports at $3 billion from $3,9 billion resulting in a trade deficit of $1,8 billion compared to $2,4 billion last year.
Empowerment policy to be determined on a sector by sector basis.
Royalty on gold from primary producers lowered to five percent from seven percent.
Zimbabwe foreign debt at $8,8 billion.
Government expenditure for the period under review leaps 5,6 percent on $1,848 billion target
Treasury pays $1,8 million to the World Bank, $1 million to the AfDB and $900,000 to the IMF  between January and June towards servicing arrears. Over the same period, Zimbabwe paid $180 million to service Chinese debt.
Interest earned on a savings instruments that will be issued by mortgage funders to be exempt from tax with effect from 1 November 2014.