HARARE - Zimbabwe is targeting a $700 million (R10.2 billion) increase in annual revenue from the proceeds of a 2 percent tax on money transfers, Finance Ministry Permanent Secretary George Guvamatanga said.
Presenting the ministry’s expenditure proposals for 2019 to lawmakers in the capital, Harare, Guvamatanga said $4.3 billion of the $5.7 billion revenue anticipated in the current fiscal year would come from collections by the Zimbabwe Revenue Authority.
The government is due to present next year’s budget in November.
Guvamatanga rejected criticism of the transactions tax.
“Although this is a bitter pill to swallow, we have to accept the principle that it was necessary for everyone including our large informal sector to contribute to the fiscus,” he said.
RESTRICTIONS ON IMPORTS
Zimbabwean President Emmerson Mnangagwa, last week, moved to lift restrictions on imports, curbing exports and rail-roading new laws to arrest currency traders under Temporary Presidential Powers regulations.
The measures are among a coterie undertaken by authorities to regain waning confidence and to jumpstart economic activity amid continuing headwinds for businesses and companies.
Mnangagwa's administration has struggled to stem value loss in the local bond note quasi-currency unit. Growing calls for the bond notes to be abandoned have been rebutted although bank say it is now just a matter of time before the Zimbabwean unit is set aside.
The government threatened traders for distorting the pricing framework in the country, with Mnangagwa that he would push through legislations to deal with currency manipulators.
“Wanton illicit currency deals happening in what is known as the black market, our economy has been disturbed,” Mnangagwa said, “Zimbabwe had suffered massive market failures which are manifesting in the complete collapse of the pricing framework for virtually all commodities.”
More than $9 billion circulates through various mobile money, electronic and digital payment platforms and Mnangagwa said that such payments could not be tracked by regulators.
This week the government allowed Zimbabweans to bring in goods from neighboring countries. Shop shelves have been emptying up in Zimbabwe as goods find a way onto the streets where prices are exorbitant.
Some local industry groups have however criticised the lifting of the imports, most of who are shipped from South Africa.
Buy Zimbabwe pressure group said it was "concerned about the negative impact of the sudden repeal" of the import restrictions.
Former finance minister and opposition lawmaker, Tendai Biti, said the new measures would become ineffective.
"The present day melt down and dislocation only happens when a country has gone through a war. It’s a man mad tsunami," said Biti.
Zimbabwe has also curbed the export of some goods into regional markets although export companies are major forex earners for the country. Exporters have frequently complained of stalled handling of permits and delays to access their earnings from their banks.
“The measures are aimed at curbing shortage of basic goods in local shops and also in a way contributing to the stabilising prices of goods,” said a government official during the week.