2C TAX TO REMAIN IN FORCE ‘It’s critical in reviving economy which suffered two decades of stagnation’
responded President Mnangagwa.
Last Friday, Finance and Economic Development Minister Professor Mthuli Ncube announced upper and lower limits for the Intermediary Money Transfer Tax.
Prof Ncube said transactions below $10 will no longer attract the 2 cents tax, while all transactions above $10 to $500 000 will comply with the new tax regime.
Further, the new tax, which will be gazetted “soon”, will not apply to eight other types of transactions which are; inter-company transfer of funds, including transfers of intermediary accounts; transfer of funds on sale and purchase of equities; transfer of funds on purchase and redemption of money market instruments; transfer of funds for payment of salaries; and for payment of taxes.
The tax will also not apply to transfer of funds to intermediary accounts, transfer of funds in respect of foreign currency-related payments and transfer of funds by Government.
President Mnangagwa underscored the fact that Government will not deliberately hurt citizens, who are already contending with a number of challenges, but explained that the new measure was necessary to push the economy forward.
“We have taken cognisance of not punishing our people unnecessarily. But it is necessary, if you look at the challenges we have now, both of the issue of internal debt and external debt.
“Where we stand today as Zimbabwe, for us to become a viable economy, a solid economy, we are going to take measures that are going to be painful. And this is one of such measures.”
The country’s internal debt is $9,5 billion as at August this year, up from $275,8 million in 2012 while the external debt is $7,4 billion. The total debt is $16,9 billion. Prof Ncube is currently in Bali, Indonesia where he is engaging some of the external creditors including the World Bank, the International Monetary Fund (IMF), African Development Bank (AfDB) and the Paris Club, among others.
President Mnangagwa said the 2 percent tax, which has caused discomfort to some people in the country, can always be refined.
“I have no doubt as you say possibly, it (the tax) could have been better but at this time, we hav e begun what we have done (and) as we go on, as we dialogue; we are likely to improve on what we are doing but there is always the beginning, and this is the beginning.
“And it is good that we are now receiving reactions, responses, some positive (and) some negative like yourselves on this issue, but as we go forward, we must strike the balance between what is good for us again to support the public sector in order to have a huge percentage of the budget being applied to capital expenditure than social expenditure.
“This is what is there. We will not please the taxpayer, no, we want to please the economy of the country, not the individual. The individual, myself, yourself must make sure that we produce and produce and produce.
“We need productivity, productivity, for us to earn the foreign currency which we can use to modernise and retool both industry and commerce. It will not come from anywhere but from productivity,” said President Mnangagwa.
He explained that to leapfrog the economy and make-up for the lost two decades which were characterised by stagnation, measures such as the 2 percent tax have become important.
President Mnangagwa said citizens, industrialists and Government may differ on how to achieve the desired results, but action has to be taken.
“Yes, we may differ on how the journey must be walked but we must begin walking, as we walk the journey, the genuine and patriotic Zimbabweans will come and say we should do it this way, why don’t we do it this way, and we are listening leadership.
“We will always take on board those contributions that we think are constructive and progressive for purposes of again having a solid economy of our country.
“We want to please the economy, not individuals. Individuals must produce so that we can earn foreign currency to modernise and retool our industries,” said President Mnangagwa.
He said the liberalisation of the economy has its own pains and the tax was one of the pains that companies and individuals should be prepared to go through.
The President also said the country will not continue to live in the past when the world is going ahead with ICTs in terms of revenue collection.
“The traditional methods of revenue collection are changing by the day. The world is migrating from the past to the modern ICTs and as Zimbabwe we must follow and adapt ourselves to modern trends of revenue collection,” he said. GOVERNMENT has set up four technical teams to monitor and evaluate the implementation of projects with one of the committees tasked to ensure that resources are distributed equitably across provinces in line with President Emmerson Mnangagwa’s devolution thrust.
Finance and Economic Development Minister Mthuli Ncube said the setting up of the monitoring and evaluation teams comes at a time when Government wants to inculcate a culture of accountability in the implementation of its projects.
This is contained in the Transitional Stabilisation Programme (TSP) economic blueprint that Prof Ncube launched last Friday.
The Minister said under former President Mr Robert Mugabe’s era, the country had been consistently formulating economic blueprints without strict adherence to them.
“There was never a concerted vision of implementing more longer-term strategies that entailed pain and sacrifice, extending beyond shortterm populist consumptive interventions,” he said.
“The Old Dispensation behaved as if the rest of the world owed us, content to dwell on past and historical injustices without developing and adopting strategies that pulled out the nation from under-development.”
Prof Ncube said perpetual focusing on the past saw a decline in macro-economics, decay in infrastructure with standards of living plummeting while the Government did nothing.
He said for the Second Republic to achieve President Emmerson Mnangagwa’s vision of making the country a middle income nation by 2030, it has to adhere to strict evaluation and monitoring of projects. “The implementation, monitoring and evaluation of this TSP will involve the participation of all key stakeholders. This will embrace Government, business, labour, civil society, academia, development partners, and communities,” he said.
Prof Ncube said Government has set up a high level results framework and associated indicators for tracking the performance of the TSP against clear baselines and targets that will be central for success.
“Accordingly, a Comprehensive Matrix of Policies, Projects and Programmes to be undertaken, as well as the attendant results to be achieved over the programme period will be developed,” said Prof Ncube.
“This will be for purposes of tracking progress and measuring results during the implementation of the Transitional Stabilisation Programme, and offer an opportunity for periodic reviews.”
He said the monitoring and evaluating team will include among others a steering committee led by the Office of the President and Cabinet which will play an oversight role in the implementation of the policies.
“Oversight will be undertaken through a Steering Committee comprising of co-chairs of the Focal Areas, and chaired by the Chief Secretary to the President and Cabinet and will meet on a quarterly basis,” he said.
The Minister said the other committee will be the Devolution Monitoring Committee consisting of experts to ensure that funds can be applied equitably across provinces and would be inclusive of communities.
“The actual implementation will be done by line Ministries, including all the development players. Consequently, in order to ensure the enhanced partnerships and synergies in the implementation of the TSP, Ministries will be grouped into Focal Areas to be co-chaired by line Ministries and Private Sector or Civic Society. These Focal Areas shall be cascaded as well to the Provincial and District levels,” he said.
Prof Ncube said there will be a technical committee headed by his Ministry which will co-ordinate with line ministries including their co-chairs and focal persons in those departments.
“This will be chaired by the Ministry of Finance and Economic Development and will meet on a monthly basis and will produce reports which will be submitted to the Steering Committee,” he said.
“The thrust of the Technical Committee will be to identify gaps in the implementation of policies, programmes and projects and make appropriate recommendations for policy reviews so as to improve the efficiency and effectiveness in the delivery of the scheduled results.”
Prof Ncube said his Ministry will also ensure allocation of adequate budgetary resources for Monitoring and Evaluation of policies.
He said another team will be the Fiscal and Financial Stabilisation Committee to co-ordinate and monitor adherence to the fiscal and monetary targets outlined in the economic blueprint. — @ nqotshili