THE Finance and Appropriation Bills 2007 this week passed through senate without amendments and is now awaiting President Robert Mugabe’s assen
If passed the Bill will give effect to the fiscal measures announced by Finance Minister Samuel Mumbengegwi in his maiden mid term fiscal policy and supplementary budget last week.
Mumbengegwi said the Finance Bill would, among others, amend clauses of the Finance Act that fixed rates of tax, duty, levy and other charges so that these could be altered through Statutory Instruments when appropriate instead of waiting until parliament ratified them. The Bill would also allow adjustment of the minimum taxable incomes.
The Bill also seeks to allow ministries to draw funds allocated in the supplementary budget from the Consolidated Revenue Fund.
Mumbengegwi said apart from benefiting workers, measures contained in the budget were also meant to stimulate production.
“Once we stimulate production, our economy would be on the road to recovery,” Mumbengegwi said.
Some ministers and senators this week accused Mumbengegwi of allocating less money to “important ministries” at the expense of those which did not require much money.
Minister Mumbengegwi defended the allocations, saying due consideration was made with relevant ministries before funds were allocated.
An analysis of budget statistics shows that government was living beyond its means as recurrent expenditure was greater than current tax revenue.
In principle recurrent expenditure should be entirely financed from current revenue such that any deficit to be reported would have been incurred through expenditure on capital projects.
Movement for Democratic Change Secretary General Tendai Biti said government’s claim that the supplementary budget would not exceed the original budget presented in December 2006 by 800% betrayed a “lack of elementary understanding of the nuts and bolts of economics”.
“Even more importantly, it exposes the fact that the regime has no control over this failing economy and worse still, that they do not care,” said Biti.