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PROPERTY REPORT – Govt revenue projections shrink

Roadwin Chirara

THE depression in the property sector has significantly affected government revenue collection projections, acting Minister of Finance Herbert Murerwa has said.

face=”Verdana, Arial, Helvetica, sans-serif”>The property sector is facing low demand in purchasing houses and property-related fixed assets due to high building costs, Murerwa noted.

Murerwa was speaking at a pre-budget seminar on the negative performance of the property sector in Mutare.

He said government had managed to collect only 50% of the targeted amount.

He could, however, not state how much the government was looking at raising in the property sector.

“The negative performance was mainly due to the property market that has not been active, and this has resulted in low capital gains collections,” he said.

“Suppression of the economic activity mainly due to exchange rate misalignment resulted in viability problems for most companies. This consequently contributed to the poor performance of corporate tax.”

Murerwa told the delegates at the meeting that during the first eight months of the year, the government had been spending below the targeted levels.

“As at the end of August, total expenditure and net lending amounted to $5,5 trillion against a target of $5,9 trillion,” he said.

“This positive development is arising from a strong adherence to the budget by line ministries and this has helped government avoid a supplementary budget.”

Between January and August, Murerwa said the government had been facing several challenges which include leakage of resources on account of loop-holes in the current informal tender procedures which creates the possibility of rent-seeking among those involved in the process.

He said there was also a shortage of technical staff in the department of state roads, Local Government ministry and local authorities, particularly rural district councils.

“There is inadequate funding against a background of sub-economic pricing of goods offered by local authorities and some central government departments,” he said.

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