The ManicaPost
Govt cushions low income earners
Rumbidzayi Zinyuke Senior Reporter
Government has approved a 300 percent increase in electricity tariffs effective immediately as it seeks to cushion the power utility in light of rising costs of raw materials, while the tax-free threshold for low-income earners has been reviewed upward from $350 to $700 to improve disposable incomes.
Prof Ncube said the electricity tariff for domestic consumers had been increased to 27c/kWh from 9,86c/kWh.
Non-exporting businesses will pay ZWL45c/kWh from ZWL9,86c/kWh while the tariff for ferrochrome smelters and other miners at US$0,067/kWh and US$0,0986/kWh respectively.
Zesa will also be allowed to bill all other exporters and foreign currency earners in forex and such resources are to be ring-fenced in a special account solely for purposes of importing electricity. Presenting the Mid-Term Budget Review yesterday, Finance and Economic Development Minister Professor Mthuli Ncube said this would stimulate aggregate demand for goods and services.
“In order to cushion taxpayers against bracket creep and also stimulate aggregate demand for goods and services, we propose to review the tax-free threshold from the current ZW$350 to ZW$700, further widen the tax bands to a maximum of ZW$30 000, above which income is taxed at the marginal tax rate of 40 percent, with effect from 1 August 2019,” he said.
He also reviewed the maximum tax payable per transaction by corporates from the current ZWL$10 000 to ZW$15 000 for transactions with value exceeding ZWL$750 000.
Prof Ncube announced a supplementary budget of ZWL$10,85 billion in the mid-term budget with a projected total expenditure of ZWL$18,62 billion, against anticipated revenue collections of ZWL$14,1 billion.
“Cognisant of the prevailing severe drought and the need to revive the agriculture sector, Government will extend support towards the agriculture sector during the 2019/20 agriculture season, while nurturing the private sector to play a greater role in subsequent years. As a result, the 2019 Mid-Term Review is setting aside ZWL$1,67 billion towards support of strategic crops of grain, soya beans and cotton under the following programmes,” said Minister Ncube.
The budget also set aside ZW$414,3 million to sustain ongoing efforts in the restoration of cyclone Idai damaged infrastructure and livelihoods for affected communities.
An additional ZWL$1,3 billion was proposed to cater for various projects in the energy, transport, water, public amenities, social services, irrigation and other infrastructural projects.
“This gives a total infrastructure budget of ZWL$2,5 billion, constituting 35,4 percent of total capital development budget,” said Prof Ncube.
Other measures announced by the Minister include the removal of duty on lithium-ion solar batteries to promote investment in solar energy in light of the persistent electricity challenges.
