HARARE – Zimbabwe’s Finance Minister Mthuli Ncube yesterday ushered in a new fiscal era in the country that introduced expenditure cuts for senior public servants and laid the ground for further revenue consolidation.
Ncube said the austerity measures would include an increase in excise duty on cigarettes from $20 (R280) to $25 per 1 000 sticks, motor vehicles and other selected goods in foreign currency. He also announced an increase in fuel prices.
“The increase in consumption is clearly unsustainable, considering that the available foreign currency reserves have to be shared among other critical priorities,” Ncube said. “I, therefore, propose to increase excise duty by 7 cents per litre on diesel and paraffin and 6.5c on petrol to reduce the arbitrage opportunities.”
Ncube said the economy was thus projected to grow 4 percent this year before reclining to 3.1 percent next year against the backdrop of revenues amounting to $6.6 billion in revenues. He said the revenue would, however, be outstripped by expenditure, leaving a deficit of about $1.6bn for 2019.
Ncube said the government would introduce measures to collect tax from service fees paid for Zimbabwe services.