My 2021 Budget Proposals

 Resource Tax

Zimbabwe was once run by a company called British South African Company. The company sole purpose was to exploit resources and export them to feed the British manufacturing industries in the UK. After the 1922 referendum which was about joining the BSAC territories to South Africa, the company split its interests into various companies like Anglo American Corporation,  Lonrho, Meikles, British American Tobacco and various other entities.

The above narrative still stands. The surrogate companies under the British South Africa Company are still exploiting the Zimbabwean resources and feeding into the British economy at our disadvantage.

The following resources need to be taxed on point of export as the BSAC surrogates have been under-invoicing and resulting in serious revenue leakages.

1.Tea......per tonne US$100
2.Timber (indigenous +exotic) cubic metre US $100
3 Fruits
4 Horticulture
5. Game animals
6. Game meat
7. Leather and hides.


Motor Vehicle tax
I feel the duty on second-hand cars should be paid only on vehicles which are more than ten years. My take is that only individuals imported vehicles should be exempted while as car dealers should pay a prohibitive duty of 100%.

Fuel tax
Taking into consideration the scrapping of duty on second-hand vehicle, the government should charge about 15% of the cost of fuel as tax.

Industrial property and land tax
Local authorities must be allowed to charge tax on all unlicensed and unproductive industrial properties and land.


Infrastructure  Direct Rebates
A 100% tax rebate must be granted to firms in industry and commerce on infrastructure development. The rebates can be claimed after certification and inspection by the District Development Fund.

1. Access roads
2. Pavement repairs
3 . Dams on farms
4 . Irrigation equipment
5. Road Construction equipment
6.Electrification of adjoining rural areas.

Grain Incentives

A premium of 25% on international maize meal price should be paid to all farmers who deliver to the Grain Marketing Board. This premium should be fixed for the next five years.

ReplyForward

The Elusive Zimdollar

The forex auction by the RBZ has slowed down the runaways rate of Zimdollar versus the USA dollar. The effect of the government policy on the errant and arrogant twins of the Zimbabwe Stock Exchange and mobile money agents seems to have taken the steam of the black market rollercoaster.

The forex auctions have unbelievably mirrored the foreign currency demands of industry and commerce.  The forex auctions have taken the voodoo analysts and bush economists by surprise. These voodoo analysts and bush economists are already claiming the auctions are rigged.....

The Multinationals Dilemma

  Multinationals particularly those in the retail sector are still putting a premium on the Zimdollar prices in an effort to channel forex from the formal economy into their greedy and dirty hands. This is evidence of their role in the fueling of the black market. 

The Multinationals which l have dealt with OK, Pick and Pay and FedEx tends to have a lot of exchange rates in effect. They are not charging the official exchange rates. 

These firms are buying the US$   using a rate of 81 but pricing their products using the black market rate of about 100 ZWL.

The Government and the RBZ Financial Intelligence Unit should take action against Ok, Pick and Pay and FedEx to mention a few who are charging a premium on their ZWL prices. 

My experience was with FedEx who is charging US$5 and $600Zw for overnight delivery.....it is cheaper to pay in US$  than to use the Zim dollar.

Competition and Tariff Commission

The above practice of putting a premium on Zimdollar price is an unfair trade practice. The Competition and Tariff Commission should play a proactive role and penalise the entities that are caring out the unfair trade practice. Policy coordination between the Reserve Bank of Zimbabwe and Competition and Tariff Commission is not clear. There is a grey area of the policy here..it seems as forex control, inflation-fighting and money supply are the preserve of Treasury  (the Ministry of Finance and Reserve Bank of Zimbabwe.) This is wrong as there are departments which should be fighting this unfair trade practice starting with the Consumer Council, Competition and Tariff Commission and the police to mention just a few.

 We as consumers although we have identified the unfair trade practice we do not know where to report. The RBZ has a toothless department called the Financial Intelligence Unit whose only interface with the public is a WhatsApp number which is inactive and useless. I speak from experience.

 This pattern of activity by industry and commerce is outrightly illegal, but the grey area of the RBZ policy on the pricing of goods in Zimdollar and forex make it even more difficult for other government departments to enforce or to make legal and regulatory decisions to protect the general public.

The Minister of Finance and the central bankers must give directions through statutory instruments so that any given illegal activity on pricing is prosecutable.RBZ should authorize given government departments to enforce its interests and priorities in the economy.

 As it stands, the forex auctions have worked well, but it is being entirely ignored by industry and commerce. This is going to undermine, in the long run, the confidence of those entities that are participating in the forex auctions. 

The Ministry of Finance should engage authorities and actors' for the forex auctions to have an impact on the lives of all Zimbabweans.