Zimbabwe introduces measures to plug financial resources loss

ZIMBABWEAN Finance Minister Mthuli Ncube has introduced a raft of measures meant to shore up the country’s dwindling financial resources, including a new tax on mobile money transactions, a reduction in the civil service, limiting international travel, and the disposal of state entities.

Ncube said that the tax review, which comes in the wake of sweeping measures made last Monday, would be effective once the relevant regulations had been gazetted.

“The two cents per dollar tax will apply on transactions of $10 (R147.47) and above only. Transactions below $10 will be exempt from this tax. There is a cap of $10 000 on the amount of tax to be paid. This implies that transfers above $500 000 will attract a flat tax of $10 000,” he said.

Intra-company transfers and transfers of salaries, tax payments, foreign currency-related payments, and transfer of funds by government would be exempt.

Addressing journalists earlier on Saturday, Ncube said that in this transition period government would not be treated as a sacred cow, as the Treasury had begun to close loose financial taps, and rejecting “unjustified” requests for funding, starting with glaring leakages such as extravagant foreign travel, unscrupulous procurement practices which ripped off government, imprudent borrowings to finance unnecessary expenditure, and lavish spending on luxury cars and benefits for senior civil servants.

Civil service would be “right-sized” through retrenchments, retirements, and skills restructuring, backed by a new incentive system which would be introduced for those retained.

The 2019 and 2020 national budgets would introduce wage bill containment measures which would reduce the annual wage bill outlay by $200 million, about 0.7 percent of the country’s gross domestic product.

“We are dealing with a bleeding economy, a bleeding government. We are asking everyone to contribute to fixing the economy. We cannot do this without pain. My view is that there’s more pain at the beginning of the first year or two as we stabilise our macro-economy,” Ncube said. | African News Agency (ANA)