GWERU – Economists have welcomed the increase of proposition of salaries for civil servants as this
will help ease the situation of civil servants and help curtail the exodus of workers especially in the
health sector.
Commenting on the national budget presented by Finance and Economic Development Minister
Professor Mthuli Ncube last week, former Zimbabwe National Chamber of Commerce president and
Political Actors Dialogue principal Trust Chikohora said the increase in the proportion of salaries for
civil servants from about 42 percent to about 52 percent of the total budget was a welcome
development.
“It is welcome in the circumstances because civil servants plight needs to be considered, their
remuneration needs to be improved.
“So, one hopes that increase in the proportion of remuneration to the total budget will help ease the
situation for civil servants, particularly with the loss of staff that we are experiencing especially in
the health sector. It is important to make sure that issues of remuneration for civil servants is
appropriately addressed,” said the renowned chartered accountant.
Chikohora noted that the budget has reasonable targets, especially looking at the projected growth
for 2022, which is expected to end at four percent and the envisaged growth in 2023 of 3.8 percent.
“When you look at the budget deficit which is projected at 1.5 percent of GDP that is also within
acceptable threshold. In broad terms those key numbers seem reasonable,” he said.
The Polad economic thematic committee chairperson said the lifting of suspension of duty on basic
commodities will have an adverse effect on consumers particularly during this festive season and
going beyond.
“It will depend whether the locally produced goods will remain at the current level of prices. This will
depend on the reasonableness and professionalism of the local producers and retailers.
Notwithstanding the lifting of suspension of duty on imports then we will not see a rise in prices,
particularly during this festive season and beyond,” he said.
“This is something that the government needs to pay a closer look at going forward so that we do
not have negative consequences for consumers. The increase of VAT back up from 45.5 percent to
15 percent, that again is ill-advised as it will further burden the consumers who are already suffering
in a difficult economic environment.
Chikohora noted that the lifting of suspension on duty on imports and the increase in VAT at the
same time, was an ill-advised move as he was anticipating the Finance Minister to maintain VAT at
14.5 percent or reduce it to 14 percent.
He applauded the government for taking on board their input of not bringing up the IMT Tax to four
percent “which is even higher than local currency as it was going to discourage people from using
the banking system for foreign currency”.
“So, the government has listened to this and has now reduced the IMT Tax on foreign currency to
two percent to be the same as the local currency, that is welcome.
“For us we continue to say the IMT Tax is a huge cost on the public and even on corporates. It needs
to be looked at even at actually reducing it from two percent down to maybe 1.5 percent as we go
forward,” said the Polad principal.
He urged government to allocate more resources to the rail sector in order to improve and enhance
the competitiveness of Zimbabwean products.
Chikohora challenged the government to complete various projects in 2023, which will change the
face of the country as outlined in the National Development Strategy (NDS 1).
He is worried that the Finance Minister did talk of the tax-free threshold for employees for 2023 at a
time when inflation levels are high while anticipating to see an improvement in the disposable
incomes of employees.
“That silence on the tax-free threshold leaves a lot to be desired,” he said.
Chikohora welcomed the rebasing of capital allowances for capital expenditure to the USD value at
the beginning of each year as this will help to ease the income tax burden for corporates and
businesses.
