ANNUAL tax payments by corporates have reduced the government’s advances from the Reserve Bank of Zimbabwe (RBZ) as the state has now utilised that money to pay for civil service salaries
and the purchase of Finhold shares.
The central bank advances to government have increased from $427 billion to $565 billion in a space of two months.
Corporates declare their taxes three times a year.
In February they pay 50% to the state while the remaining 50% is paid in June and November.
When the latter is finally paid the money would be split into 25% each.
Local companies are taxed 30% of their gross earnings while individuals are levied a whopping 45%.
To date the central bank advances to the government are $565 billion which indicates that government is already spending deposited money from coporate firms.
Analysts said government used the money to increase its stake in Finhold which resulted in the expenditure shooting to half a trillion dollars.
The analysts said the coporate tax declarations were also “used to pay civil servants salaries”.
On Tuesday last week government increased its stake in Finhold from 12% to 26% making it the second biggest investor after the National Social Security Authority.
Despite public announcements by the central bank governor Gideon Gono in December that he would limit government access to the overdraft facility, businessdigest earlier this month revealed that the state was doing exactly the opposite.
Since January, the government has been side-stepping regulatory requirements on its overdraft facility as it was being availed more money than it is supposed to get.
This is in contradiction of the central bank Act that stipulates that the state should be availed amounts not exceeding 20% of the previous year’s ordinary revenue.
Even Gono’s predecessors have been failing to rein in on government’s appetite for money and in the process failing to live within its stated policy framework.
But analysts have however said the continued abuse by the government of the overdraft facility has been caused by lack of clarity in the Act on what penalties government faces if it ignores laid down regulations.
Recent figures from the central bank indicate that on February 20 government was availed $164 billion but as the government norm it began to utilise deposited funds before they cleared as a week later it had used $278 billion.
The quest for easy money led to the state using $568 billion as of March 5 but the advances slightly went down to $565 billion as of March 12.
Government continues ot abuse the RBZ lending facility.