HomeBusiness DigestNcube promises to reduce tax burden

Ncube promises to reduce tax burden

FINANCE Minister Mthuli Ncube has promised relief on some taxes ahead of his interim budget on July 31, 2019, as a mid-term fiscal review statement measure to cushion people against the continuous erosion of disposable incomes, it has emerged.

Melody Chikono

This comes as the 2% tax he introduced when he took office in September last year has become a solid revenue generator for the country, generating in excess of $90 million per month.

Ncube on Wednesday told delegates who attended a conversation with Alpha Media Holdings chairperson Trevor Ncube in Harare that his office was impressed with the performance of the 2% tax, driven by the compliance it has received since inception.

It was against that background that he was certain that the country would do without other taxes (although he would not mention them) in the short term, as it tries to come up with a long-term solution to cushion the suffering masses from the ever-increasing prices.

The country has been hit hard by inflation since last year with year-on-year inflation surging 75,86%, the highest since the introduction of the multi-currency regime in 2009, driven by skyrocketing prices of fuel, basic commodities as well as currency volatility.

While he acknowledged the suffering that has come with austerity measures, Ncube said government was convinced that tax breaks have become necessary at a crucial moment like this. “I understand the pain these austerity measures have brought especially the 2% tax which I’m unpopular for, but I tell you that this tax has performed well and much of our revenue has been from the 2% tax. We are collecting an average of ZW$90 million every month, by year-end we should have collected about ZW$1,1 billion, so we are still set on that target because every day people are spending money and they still transact. The passion for me for that tax is compliance . . . we are considering lowering other taxes,” he said.

Ncube said the government had other mid-term to long-term measures that will see having favourable disposable incomes, saying government will also continue to cushion its workers, urging the private sector to do the same.

Zimbabwe has been blamed for having a complex tax regime which has deterred investment in the country.

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