Treasury to Cover Revenue Gaps as Zimbabwe Slashes Business Fees

By Tinomudaishe Muzanenhamo

Government will step in to support regulatory bodies that may lose income following sweeping reductions in fees and levies, Finance Minister Mthuli Ncube has said.

Speaking during a post cabinet press briefing in Harare, Prof Ncube said the government had already reduced charges in nine of the 12 targeted sectors with the remaining changescovering crops, horticulture, fisheries and fertiliser expected in the coming weeks.

“We intended to reduce fees and levies for about 12 sectors. So far, we’ve done nine. We have three more to go,” he said.

The reforms are part of broader efforts by the Government to lower the cost of doing business and stimulate economic activity.

However, Prof Ncube acknowledged that the cuts could affect the financial position of regulatory agencies some of which rely heavily on such fees for their operations.

“As Treasury, we stand ready to fill any legitimate gaps in revenue which may jeopardise the efficiency of operations for these entities. We do not want their capacity to be impaired,” he said.

He added that the policy assumes businesses will benefit from lower costs and become more profitable ultimately generating higher tax revenues.

“The assumption is that businesses will make more money and pay more taxes, which allows the Treasury to rechannel some of that revenue back to regulators,” he said.

Despite the announcement, Prof Ncube cautioned that implementation would not be immediate as legal processes must first be completed.

“It takes time for lawyers to identify which statutory instruments must be amended or repealed. The public must wait for these to be enacted before expecting implementation,” he said.

In a related move, the minister announced the introduction of a national standard price list aimed at curbing overpricing in public procurement.

The system, now integrated into the e-procurement platform managed by the Procurement Regulatory Authority of Zimbabwe, sets acceptable price ranges for commonly purchased goods and services.

“We have noticed overpricing by suppliers to the Government. This price list ensures that anything above the specified range is flagged and rejected,” Prof Ncube said.

Officials say the measure is expected to improve transparency, reduce wasteful spending and speed up payments to contractors.

The Treasury also reaffirmed its preference for settling payments for locally sourced goods in Zimbabwe Gold (ZiG), as part of efforts to strengthen the domestic currency.

Prof Ncube said the Reserve Bank of Zimbabwe had assured authorities that sufficient foreign currency reserves were available to meet demand for imports.

“We have between US$1.2 billion and US$1.5 billion in reserves, including gold. This is adequate to cover demand,” he said.

He also dismissed concerns about excess liquidity in the market, saying monetary tools were in place to maintain stability.

“There is no excess liquidity sloshing around… instruments such as non-negotiable certificates of deposit and open market operations are in place to mop up any surplus,” he said.

Prof Ncube added that increased demand for the local currency driven in part by government procurement policies could support its value.