CITIZENS’ BUDGET EXPECTATIONS

As Finance Minister Mthuli Ncube prepares to present the country’s 2023 National Budget on Thursday, we call for a PRO-POOR budget.

What are the key issues that citizens expect to see addressed?

TAX REFORM FOR WORKERS:

Govt must reduce the tax burden on workers & civil servants. The tax-free threshold must be increased in line with the rising cost of living to cushion citizens, 49% of whom live in extreme poverty.

Consumer basket currently exceeds $300,000.

TAX REFORM FOR BUSINESS:

The 4% tax on transactions in foreign currency must be removed as it increases the cost of doing business & the cost of goods. .

The economy has effectively dollarized so there’s no rational justification for retaining this punitive tax.

Equally, the 2% tax on Zim Dollar transactions should be scrapped.

It was introduced as an austerity measure so it cannot be retained long term.

SOCIAL SERVICES:

The budget must allocate adequate funding for social services especially health & education to foster a strong economic base.

15% must go to Health in line with the Abuja Declaration.

20% must go to Education in line with the Dakar Declaration.

A MARKET-LED ECONOMY:

We call for a budget that reinforces a market-led economy.

The last 4 budgets have wrongly focused on distortions & command economics (eg Command Agriculture) which destabilized the economy & caused exchange rate spirals.

MARKET-LED FINANCING OF AGRICULTURE:

We call for market-led financing of agriculture not any form of command agriculture.

Grains such as maize, wheat & cotton must be added to the commodity exchange & funded through value-chain financing models/warehouse receipts.

Command agriculture (by whatever name called) has failed to increase productivity or guarantee food security.

We still import to meet our food requirements. The World Bank reports that Zim has performed dismally in agricultural productivity compared to other SADC countries.

BUDGET MUST BE IN USD:

Govt must budget in US dollar terms to eliminate the need for a supplementary budget as experienced with the current budget.

Govt cannot ignore the fact that the economy has effectively dollarised. 70% of transactions in business, loans, fuel, passports & many Govt levies are now in USD.

It therefore defeats logic to do a budget in ZWL, a currency that is out of touch with the economic realities.

We further call for the timely & full disbursement of funds to Govt depts to ensure their smooth operation.

(C) Citizens’ Coalition for Change