Harsh taxes dominate talk as budget nears

Local captains of industry yesterday said they were expecting Finance minister Mthuli Ncube to present a national budget that allows them to pay taxes in Zimbabwe dollars as a way of increasing demand for the local currency.

Ncube will present the national budget next month at a time when the economy is facing major headwinds that include currency volatility, high inflation, liquidity constraints, policy inconsistency and rolling power cuts.

According to a budget strategy paper, Ncube is expected to table a $3,4 trillion budget for next year with nearly half of the revenue going towards employment costs and pension.

The budget will be nearly double the $1,9 trillion expenditure for 2022.

Annual inflation is projected at 100,7% next year, a very conservative figure considering elections-induced spending and the Russia-Ukraine crisis.

Some experts have put the figure at 400%.

Zimbabwe National Chamber of Commerce (ZNCC) president Mike Kamungeremu said he hoped that Ncube would review the intermediated money transfer tax (IMTT) on nostro transactions downwards because the current 4% was too high.

“Additionally, we hope IMTT will become tax deductible because currently it is not. We also expect tax brackets to be reviewed so that our employees are cushioned. They are key for the success of business and currently are heavily taxed,” he said.

“In addition, we commend the government for continuing to support industry and we hope another allocation will be provided in the 2023 budget to support value chains. Some companies are still yet to fully recover from the effects of COVID-19 and that package is very much needed.

“We also hope the incentives currently in place for the tourism sector will continue for at least another 12 months to allow that sector to fully recover.”-newsday