Former Finance Minister in the Government of National Unity (GNU) and opposition Citizens Coalition for Change (CCC) Harare East legislator, Tendai Biti says the Zimbabwe dollar-indexed 2023 national budget announced by Finance Minister Mthuli Ncube is anti-people.
Speaking after the Finance Minister unveiled a $4, 5 trillion National Budget for 2024, Biti said the budget should have been dollarised.
“A very cruel budget when you consider the increase in VAT to 15%, but I think the fundamental problem is that with inflation of 268% and the fact that most government revenues are now pegged in US dollars, this budget to be meaningful, ought to have been indexed in US dollars.
“In our view, he should simply have announced a US$4 billion budget. If you look at the figures, it is a $4.2 trillion budget, which translates to US$4 billion at an exchange rate of the used USD1 to ZW$100.We find it a very anti-people budget premised on very faulty assumptions that the country will have a good rainfall season and solid international commodity prices; his assumption is that we will have power (electricity) next year, which is all wrong assumptions and faulty.
“We already know the challenges of power, the global challenge that almost all economies are in shrinkage. It’s a pipe dream. In simple terms, this should have been a budget in USDs, he should have dollarised the budget, and he should have floated ZW$. Ncube should have reduced the interest rate from 200% to 20%,” Biti said.
In his budget, Ncube said the government had observed that some entities were now transacting in cash, instead of electronic transfers to avoid the tax.
“In order to promote use of the banking system, I propose to align the IMTT on foreign currency transactions to local currency transactions at a rate of 2%. This measure takes effect from 1 January 2023. In addition, the government will consider reviewing other measures to strengthen the foreign currency system, including the 20% surrender requirement for domestic foreign currency transactions,” Ncube said.