FINANCE Minister Mthuli Ncube is expected to unveil a “cocktail of revised taxation measures and other operational guidelines” in his mid-term budget review statement on Thursday, officials say.
This comes as the Harare administration remains optimistic about the country’s six percent growth rate – at a time sectors such as manufacturing, mining, retail and agriculture are leading in boosting gross domestic product – and the Zimbabwe National Statistics Agency has also rebased the economy to US$44 billion.
“Government is aware of concerns raised by taxpayers, particularly corporates, over the multiplicity of levies on business and the effects thereof on cost of goods and services, competitiveness and profitability,” Finance secretary George Guvamatanga said in a recent interview, adding “the second republic was keen on urgently implementing some changes upon completion of due diligences and proper research on the appropriate interventions”.
“Treasury has initiated processes to respond to these concerns by undertaking an evaluation of Zimbabwe’s tax regime (and) finalisation of that review process will provide a sense of timelines to implement those reforms (but the ministry) has always consulted relevant stakeholders within the context of the national budget or mid-term review,” he said before noting that the “policies were underpinned by a desire to improve the business environment”.
While President Emmerson Mnangagwa has set the tone by “committing to continue improving the ease of doing business by addressing the high regulatory, utility costs and enhancing border efficiency” earlier this year, Guvamatanga said a “draft report on the new measures was set to be presented to cabinet for further deliberations”, as such policies were also “aimed at creating a conducive environment for encouraging domestic and foreign-driven innovation as well as sustainable growth”.
Crucially, the reform agenda was aimed at “improving domestic resource mobilisation capabilities in the wake of limited access to concessionary funding, Zimbabwe’s competitiveness as an investment destination given the strong correlation between capital inflows and economic growth” and at a time per capita incomes are also expected to have significantly risen (even, though, there is now a need to balance out revenue earnings between the haves and majorities), he said.
“While the idea is to review, streamline compliance costs and eliminate bureaucratic inefficiencies such as duplication of roles, and so forth, this dovetails with the broader vision to transform the country into an upper middle-income economy by 2030, the graduation of informal businesses into tax-paying businesses or entities and leveraging growth opportunities provided by technologies,” Guvamatanga said.
