Zimbabwe’s Government is now funded for operations this year, with each Ministry allocated a budget for each item, and with changes to the tax structure in place so that there is revenue for these budgets.
This comes after President Mnangagwa approved this year’s $59,04 billion Budget passed by Parliament last month.
The twin Acts giving effect to the Budget comprise the Finance Act, which provides for changes in the rates of taxes, duties and exemptions, and the Appropriation Act that sets out allocations to all ministries and statutory bodies were published in an Extraordinary Government Gazette on the last day of 2019.
The Budget was passed under the theme: “Gearing for Higher Productivity, Growth and Job Creation.”
The budget comprises $57 052 700 000 charged to the Consolidated Revenue Fund until December 31 and $1 993 822 000 in Retention Funds.
According to the Appropriation Act, the Ministry of Lands, Agriculture, Water and Rural Resettlement has the highest allocation of $11 334 459 000 followed by that of Primary and Secondary Education with $8 526 223 000 and Health and Child Care with $6 567 317 000.
The ministry of Finance and Economic Development was allocated $3 987 047 000, that of Defence and War Veterans $3 112 708 000, while the ministries of Public Service, Labour and Social Welfare and the Office of the President and Cabinet got $2 370 969 000 and $2 353 887 000, respectively.
The Ministry of Higher and Tertiary Education, Innovation, Science and Technology Development was allocated $ 2 890 889 000, while that of Home Affairs and Cultural Heritage got $2 818 169 000.
The Finance Act also brings into force a number of issues concerning taxes and other revenue collection mechanisms announced by Finance and Economic Development Minister Professor Mthuli Ncube when he presented the Budget.
This includes the reduction of corporate tax, by 1 percent to 24 percent and Value Added Tax (VAT), from 15 to 14,5 percent.
On tourism, Treasury extended rebates for imports of capital equipment and safari vehicles, suspended tax on car hire, tour operators and extended tax on luxury coach imports.
The Act sets out the new excise duty on the importation of second hand vehicles ranging from $500 depending on date of manufacture and engine capacity.
The Act brings in permanent law temporary amendments to the Reserve Bank Act banning the use of any currency for pricing local goods and services, except the Zimbabwe dollar and allowing civil penalties for those who breach this.
It amends the Reserve Bank of Zimbabwe Act by providing for the establishment of the Monetary Policy Committee.
The MPC was appointed in September and is chaired by RBZ Governor Dr John Mangudya.
The committee’s functions include among others, to determine the monetary policy of the country, ensure price stability as defined by Government, inflation targets and determine the interest rates in line with the country’s economic policies and targets for growth and employment.
Other measures that are contained in the Act include the fiscal incentive to support employers who create jobs for young people where an additional job created will attract a percentage tax rebate to the employer, linked to the employee’s salary.