THE Zimbabwe National Chamber of Commerce (ZNCC), the country’s largest industrial lobby group, has urged Finance minister Patrick Chinamasa to introduce a number of reforms to boost industry and productivity when he presents his 2016 budget statement in November.
ZNCC has called on government to boost electricity generation to ensure business operates, while also warning that power cuts would make Zimbabwe unattractive for investment.
The economy is reeling from a severe liquidity crunch and controversial policies widely seen as militating against foreign direct investment (FDI). ZNCC, however, wants government to take measures to cut its bloated wage bill by collapsing ministries that can otherwise be departments in other ministries, introduce strict measures to fight corruption and review the country’s tax regime as well as the country’s indigenisation legislation, among other issues.
The business group has since September been holding meetings in different regions to capture opinions and ideas of business for possible inclusion in the budget. The workshops were held in Gweru, Mutare and Bulawayo.
ZNCC CEO Christopher Mugaga says the last meeting will be held in Harare next week.
Documents seen by the Zimbabwe Independent highlight that ZNCC wants government to fight corruption, particularly at the Zimbabwe Revenue Authority (Zimra).
“There is need to deal with corruption in Zimbabwe if the budget is to work and there is also need for whistle-blower incentives,” read part of the submissions at a September 25 ZNCC pre-budget meeting in Gweru.
“Duty on the importation of machinery should be minimal to promote retooling (and) SMEs should not be taxed the same way as large corporates. They are also overtaxed — levies from Ema (Environmental Management Authority), local authorities are too much.
“In property development (construction), there are too many taxes and charges in the sector. You are taxed when buying land from private owners, you pay capital gains tax and on subdivision you have to pay the Physical Planning Department. When you sell to a client, the client is taxed by Zimra and the client also pays to council for approval of plan. When the client dies, estate duty has to be paid on the property.
“Mining has 14 direct and indirect taxes to rural district councils, Ministry of Mines, Ema, etc. Some of the levies are not standardised. This makes cost of starting and doing business high thereby discouraging formalisation.”
The Mutare meeting called on government to ban export of raw materials and start plugging illicit financial flows. It also took a dig at Zimra saying the revenue collector should be practical in its operations.
“How does Zimra expect companies to remit Paye when they are failing to pay salaries?” reads part of the Mutare report.
The meeting proposed the Paye tax-free bracket should be increased to US$700, although some of the participants in the meeting quickly shot down the suggestion on the grounds that it would simply leave Zimra with nothing to tax.
“There is also need for Zimra to plug the loopholes in its system. Zimra is riddled with corruption, everybody must pay tax with no exceptions,” the report said.
The meeting also proposed government to stop free distribution of inputs as this is destroying agriculture and instead make the inputs affordable in order to foster responsibility.
“FDI does not come where there is no electricity and transport infrastructure,” said the Mutare chamber, adding the building of an airport in Mutare can boost the tourism industry in the Eastern Highlands.
The workshop also called for financial discipline where funds should not be diverted.
“Government should stop diversion of funds and there is need for ring-fencing, for example, let tollgate fees be used for roads and nothing else. Let us interrogate our import composition. Increase import duty on non-essential goods and those that are locally available,” it said.