HomeBusiness DigestMurerwa listens to MDC advice

Murerwa listens to MDC advice

Staff Writer

FINANCE minister Herbert Murerwa had no alternative but to listen to advice given him by the major opposition Movement for Democratic Change (MDC) in his year 2004 national budget.

This comes amid reports that closed door meetings are being held by the ruling Zanu PF party and the MDC to try and thaw relations as well as come up with a lasting solution to Zimbabwe’s economic and political crisis.

“The one thing that MDC managed to achieve through its taxation proposals in the 2004 national budget was Herbert Murerwa’s acceptance of some of MDC’s proposals on the tax threshold, bonus, pension tax, severance package and estate duty,” MDC shadow Finance minister and Hatfield MP Tapiwa Mashakada said.

He said as a result of representations made by the opposition Murerwa had agreed that the individual income tax threshold had been increased to MDC’s recommendation of $2,4 million per annum, up from $180 000 per annum in the 2003 budget.

“MDC made this proposal with the objective of cushioning low income earners whose disposable income has been eroded by high levels of taxation and inflation,” Mashakada said.

“As a result of representations made by MDC the Minister of Finance increased the tax-free portion of the bonus or performance-related award from $20 000 to $100 000 thereby releasing $14,4 billion back into taxpayer’s pockets.”

He said the other achievement was the increase in the amount of tax-free severance package although again MDC had wanted severance package to be exempted from taxation.

“MDC had also made representations for a 100% rebate on estate duty but the Minister of finance raised it from $5 million and $10 million in respect of a surviving spouse or surviving minor children to $20 million and $40 million, respectively,” Mashakada said. “MDC had also proposed that VAT be introduced at a rate of 5%. However, the Minister of Finance pegged VAT at 15% which is the same level as the current sales tax.”

He said he was happy that despite the fact that the MDC was still in opposition its ideas were being taken seriously.

“MDC is still in opposition,” Mashakada said. “The burden to craft a good budget remains the sole territory of the government. From our taxation proposals it can be seen that when an MDC government takes over, there will be a great difference for the better.”

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