HARARE- Zimbabwe's Finance minister Prof Mthuli Ncube on Thursday, presented his budget -- themed "Austerity for Prosperity" -- expected to stabilise the country's struggling economy while pushing the country into being an upper middle class economy by 2030.
Ncube's budget's growth drivers included food security and protection; human capital development; private-sector led growth; and institutions and governance. Other drivers he mentioned were voice and accountability, globalisation and peace and security.
"The 2019 budget constitutes an initial policy and financial instrument for implementing the transitional stabilisation programme (TSP) by powering the respective drivers for change and development," Ncube said.
"The budget will prioritise strengthening of institutional capacity in terms of planning, implementation, monitoring and evaluation to ensure that the TSP remains on track, attaining planned measurable results that are aligned to targets and objectives."
He lamented government's expenditure overruns, saying revenue collections are expected to peak at US$5.5 billion by end of year.
"Expenditure out turn to year end is estimated at US$8.2 billion against a budget US$5.3 billion, implying an expenditure overrun of US$2.8 billion. The 2018 budget deficit is projected at US$2.86 billion -- or 11.7 percent of [gross domestic product] GDP -- against a target of $793 million," he said.
The defence ministry received an allocation of $546.9 million and the home affairs ministry received $517.8 million.
The combined ministry of lands, agriculture, water, climate and rural resettlement received $989.3 million, with the ministry of primary and secondary education received $1.13 billion.
Ncube increased excise duty of cigarettes from $20 to $25 per 1000 sticks, introduced customs duty on motor vehicles and other selected goods in foreign currency, and ordered companies that collected value added tax in foreign currency to remit the tax in the same currency.
He also increased excise duty by 7 cents per litre on diesel and paraffin, and 6.5 cents on pertrol to "reduce arbitrage opportunities" prevailing in the market.
Ncube reviewed the individual tax-free threshold from $300 to $350 and further widened the tax bands from $351 to $20,000, above which income will be taxed at the highest marginal tax rate of 45 percent.
Ncube proposed a salary cut of five percent for all staff from the level of deputy director to the presidium, effective January 1.
- African News Agency (ANA)