Tax re­bate for job cre­ators

The Herald (Zimbabwe) - - National News - Bu­l­awayo Bureau

GOVERN­MENT is plan­ning to in­tro­duce a tax re­bate for com­pa­nies that cre­ate ad­di­tional jobs as part of broader fiscal pol­icy mea­sures aimed at stim­u­lat­ing the econ­omy to­wards an up­per mid­dle-class sta­tus by 2030.

Fi­nance and Eco­nomic De­vel­op­ment Min­is­ter Pro­fes­sor Mthuli Ncube re­vealed this in Bu­l­awayo on Thurs­day while ad­dress­ing par­lia­men­tar­i­ans and Cabi­net min­is­ters dur­ing the on-go­ing 2019 pre-bud­get con­sul­ta­tive con­fer­ence.

He said job cre­ation was at the heart of Pres­i­dent Mnan­gagwa’s trans­for­ma­tion agenda, as es­poused in the Tran­si­tional Sta­bil­i­sa­tion Pro­gramme (TSP), which recog­nises the crit­i­cal role of the pri­vate sec­tor in the econ­omy and the need to in­cen­tivise them.

“I would like to link the fiscal regime to job cre­ation,” said Prof Ncube. “Other coun­tries have done it. This is what they have done, they look at ap­pren­tice­ships, they look at jobs for the youth­ful em­ploy­ees who have just come out from uni­ver­si­ties and then they give tax re­bates to those com­pa­nies that cre­ate ad­di­tional jobs in terms of ap­pren­tice­ships.

“We could eas­ily set a num­ber and say, look we are go­ing to set a re­bate of $400 for a max­i­mum of five jobs that any com­pany cre­ates. But it must be ad­di­tional jobs, not to just fire oth­ers and then re­place them.

“So, I can prove that there are ad­di­tional (jobs) and this re­bate is go­ing to be af­ter 12 months when the per­son has spent 12 months with you as a way to stim­u­late job cre­ation.

“Let’s re­ward com­pa­nies for creat­ing jobs, es­pe­cially jobs for the youth. So, I am go­ing to push this idea fur­ther.”

Due to struc­tural changes in the econ­omy over the years, Zim­babwe has suf­fered a re­duc­tion in for­mal em­ploy­ment, which has given rise to the thriving in­for­mal sec­tor.

This has also im­pacted neg­a­tively on tax rev­enue in­flows.

Prof Ncube said Govern­ment was aware of the chal­lenges fac­ing the econ­omy and was putting all nec­es­sary in­ter­ven­tions to al­le­vi­ate the plight of or­di­nary cit­i­zens, in­clud­ing ex­pand­ing the job mar­ket.

While ef­forts are be­ing made to un­lock op­por­tu­ni­ties in key sec­tors such as agri­cul­ture, man­u­fac­tur­ing and ser­vices, Prof Ncube said great po­ten­tial lied in the small to medium en­ter­prise sec­tor.

He pledged Govern­ment’s com­mit­ment to sup­port bud­ding busi­nesses that have proved to have a huge im­pact on the econ­omy.

“One of the best propo­si­tions I have made around the bud­get, around the vision for Zim­babwe is about SMEs and the more we can do to sup­port the SMEs, the bet­ter,” said Prof Ncube.

“There is one is­sue about SMEs, it is ac­cess to cap­i­tal. The col­lat­eral re­quire­ments are just too oner­ous for the sec­tor and deal­ing with the col­lat­eral re­quire­ment is key, but also in­no­vat­ing around that.

“Maybe we should start accepting in­sur­ances on loans as good enough col­lat­eral. It doesn’t have to be a stand, a house or any­thing. We should be­gin to ac­cept that. Other coun­tries are accepting it al­ready, so we have to in­no­vate.”

Prof Ncube stressed the need to scale up in­fra­struc­ture de­vel­op­ment through a vi­brant Pub­lic Pri­vate Part­ner­ships frame­work.

Us­ing this model, he said, Govern­ment would speed up re­ha­bil­i­ta­tion of ma­jor roads and hinted that the in next three years, the Harare-Chirundu-Beit­bridge High­way upgrade project should be com­pleted.

Pro­fes­sor Mthuli Ncube

Newspapers in English

Newspapers from Zimbabwe

© PressReader. All rights reserved.