FINANCE Minister Mthuli Ncube yesterday accused opposition MPs of being dishonest by insisting that people are not happy with the 2% levy on electronic transactions, claiming the new tax has widely been embraced.
“The 2% tax is not about Zimbabweans being punished, and it is dishonest to say that they do not want it. In fact, they have embraced it, and ordinarily what Zimbabweans have only complained about is that the prices of fertiliser and goods are high,” Ncube said in the National Assembly.
“We have ring-fenced the 2% to make sure that the people of Zimbabwe benefit, such that out of the 2%, we will extract the $310 million to finance devolution. This means that we have taken money from the people to give it back to the people. The change will be used to fund education and health and closing potholes, as well as purchasing ambulances and buying school desks, and so people will feel the impact.”
On the United States dollar to RTGS and bond exchange rate, Ncube insisted it is officially 1:1.
“Government said the official rate of US$ to RTGS and bond is 1:1, and this is official, but we are aware of the various premiums applied by people out there in terms of the rate,” he said.
“To be clear, this other rate is what we call in economics; premiums. We have the fixed exchange rate regime and there is the premium which people use out there.”
Ncube said in 2009 the US$ was introduced to remove zeroes, adding that the current 1:1 fixed rate would protect savings and balance sheets of companies at banks.
But, Norton MP Temba Mliswa (Independent) asked Ncube to explain if he was admitting to the existence of the black market and what he was going to do about it.
Ncube said there was need to deal with economic fundamentals to make sure the monetary sector remained strong, and these, he said, would deal with the fiscal deficit and current account deficit, and strengthen the money supply.
On domestic debt he said by 2019 it will be serviced to the tune of $6,8 billion of which $4,86 billion will be external and $2,18 billion domestic. He said the total debt in the blue book is $17,2 billion ($7,6 billion domestic and $9,6 billion external).
Ncube said inflation as at November was at 9,2% and not the 32% figure by Zimstats, adding that NSSA figures show that there has been a rise in employment levels in the country.
Meanwhile, Speaker of the National Assembly, Jacob Mudenda berated MPs for parroting what Ncube said in the budget statement.
This was after several Zanu PF MPs contributed to the budget speech, giving thanks instead of critiquing it.
“The whole aspect of debating a budget is to discuss its impact on budgetary allocations, and not to repeat what Ncube said in his statement,” Mudenda said.
Mutare Central MP Innocent Gonese (MDC Alliance) said while Ncube pretended he was cutting spending by the Executive, several ministers have been seen driving new state-of-the-art Range Rover vehicles, with some even bragging about them on social media.
“The 5% salary cut of the Executive is a deception, because at their level, most of their remuneration is allowances and perks from gallivanting around the world for mega deals they always claim,” Gonese said.
“My proposal is that the minister must announce the austerity measures because you cannot hire a $2 million private Swiss jet for President Emmerson Mnangagwa. At least former President Robert Mugabe used Air Zimbabwe.”
Mthuli Ncube also defended the payment of import duty in foreign currency in his 2019 National Budget Statement saying the measure was premised on the ability to pay the principle.
Prof Ncube said the number of imported vehicles had increased by 700 000 within the last 12 months and that there was need to curb such imports using scarce foreign currency.
He said this in the National Assembly while responding to several concerns from backbenchers that it was wrong to levy duty in hard currency on people whose salaries was paid in bond notes or RTGS.
Harare East legislator Mr Tendai Biti (MDC Alliance) had also indicated that levying of duty in hard currency only was unlawful as bond notes were also legal tender.
“This measure is based on the ability to pay principle. In order to import, an individual requires foreign currency, therefore the source of foreign currency to import can also be the source of foreign currency to settle the duty requirement component. This brings out the element of ability to pay. It is also worth noting that this proposed measure is a demand management mechanism which is aimed at reducing the propensity to import using scarce foreign currency resources,” said Prof Ncube.
“I must add that Zimbabwe has about 1,7 million cars and in the last 12 months we had an increase of 700 000 cars in one year alone. This is a huge increase, it is increasing the demand for fuel.”
Prof Ncube also dismissed assertions that the introduction of excise duty was inflationary.
“The proposed review of excise duty on fuel is not expected to have a significant impact on the level of prices since international oil prices have been declining hence provides leverage against inflationary pressures in the first place. The current pump prices bear testimony to this fact. Retail prices are lower than those that were obtaining prior to the increase in excise duty. On the contrary they have been dropping,” said Prof Ncube.
He said Government would ring-fence $310 million from the 2 percent Intermediated Money Transfer Tax so that it would support devolution and social services such as education and health.
NewsDay