1555: Professor Ncube has concluded his address and that brings an end to our updates.
1554: Going around the country, meeting with all groups of people, I came up with the following observations. Out there, confidence is improving and the Budget is committed to cement that hope by addressing various expectations.
These expectations evolve around provision of basic services such as water, housing, food, health, education of children, among other issues. The young at colleges and those leaving colleges look forward to find and keep the jobs. In fact, people of all backgrounds want to be assured that, through the Budget, we are doing all we can to make sure that promises become a reality.
And that’s what is required of us now, each playing our part to meet the common goal of growing our economy. Precisely, this what this Budget and the NDS1 are seeking to address.
I end with a quote from an English Philosopher and Economist, John Stuart Mills, ‘All good things which exist are the fruits of originality’. And indeed, we are charting a better future through the NDS1 and this Budget.
I commend the 2021 National Budget to this August House.
1552: Mr Speaker Sir, about US$1.3 billion was spent on imported buses, light commercial and passenger motor vehicles from 2015 to September 2020. This is despite the existence of capacity by the local motor industry to assemble the above-mentioned range of motor vehicles. Furthermore, due to lack of effective standards and regulation, road unworthy vehicles, which, in some instances fail to meet environmental and safety standards, find their way onto the market.
In line with the NDS1, which underscores value addition, I propose to remove second hand motor vehicles aged 10 years and above, from the date of manufacture at the time of importation, from the Open General Import Licence. In the interim, commercial vehicles such as tractors, haulage trucks, earth-moving equipment and other specialised vehicles used in mining and construction will be exempt from this requirement.
1547: Mr Speaker Sir, Government remains committed to improving workers’ disposable income as part of the broader agenda to increase aggregate demand and savings. The recent salary and wage adjustments for public and some private sector employees necessitates a corresponding review in the personal income tax framework.
I, therefore, propose to review the Tax-Free Threshold from $5 000 per month to $10 000 per month. I, further, propose to adjust the tax bands to begin at $10 001 and end at $250 000 per month, above which the Highest Marginal Tax rate of 40 percent will apply. The above measures are effective from 1 January 2021.
1542: Honourable Members would be aware that Government has implemented a presumptive tax structure on informal businesses that include micro and small enterprises, with a view to ensure that they contribute to the Fiscus.
A number of enterprises operate from designated business premises where the landlords are either Local Authorities or private property owners such as the Gulf Complex and Kwame Mall, among others. Their place of business is, thus, comprised of partitioned units in commercial buildings.
The fixed nature of business, thus, presents an opportunity for the tax administration to improve tax collections from presumptive taxes. I, therefore, propose to introduce a presumptive tax of an equivalent of US$30 per unit per month.
Landlords will be responsible for the collection of the above taxes which take effect from 1 January 2021. Landlords that fail to collect and remit the tax will be subject to a penalty equivalent to the amount of tax payable and interest. Furthermore, landlords have the responsibility to keep accurate records regarding the number of occupants or operators in respective properties, in order to facilitate administration of tax.
1538: Notwithstanding the abundant phosphate deposits, fertilizer manufacturing has gradually declined due to antiquated equipment and competition from imports, among other factors.
In order to complement the thrust of the National Development Strategy which includes recapitalisation of fertilizer manufacturing companies and investment in new technology, I propose to introduce a Fertilizer Manufacturers’ Rebate, whereby raw materials used in the production process will be imported tax and duty free by Approved Manufacturers.
1535: As part of a broader reform process under the TSP, Government through the Central Bank introduced market determined exchange rate through the Monetary Policy of (SI 33 of 2019) on 20 February 2019. This entail transition from exchange rate of US$1: $1, initially to US$1: $2.5 and thereafter determined by the interbank market activities.
This transition resulted in currency losses to small and vulnerable households with deposits less than US$1 000 in the bank. The movement in the exchange rate from US$1: $1 to US$1: $2.5 resulted in a loss for such depositors.
Therefore, Government has made a decision to compensate the small and vulnerable depositors who had US$1000 and below, for the exchange rate movement loss from US$1: $1 to US$1: $2.5, with resources equivalent to US$75 million. The resources will be administered by the Deposit Protection Corporation (DPC).
1533: Parliament, on its part has been allocated $7,2 billion. Farmers compensation: 2021 National Budget to allocate $2 billion to vulnerable farmers.
1529: In recognition of the importance of peace, the security sector has to be adequately supported and hence, the 2021 Budget has made provision for essential requirements of security services such as training, accommodation, mobility, equipment, uniforms, medical facilities and other welfare essentials. Defence, Security and War Veterans, $23,8 billion; and Home Affairs and Cultural Heritage $23,6 billion.
1527: Basic education: Minister Ncube says 2021 National Budget will fund for the acquisition of PPEs. $52 billion to go towards the Ministry of Primary Education
1526: The 2021 National Budget will allocate $54,7 billion to the health sector. Tertiary education sector will get $14, 4 billion
1524: $19,5 billion to be allocated towards Devolution in 2021. Housing and Social Amenities Ministry to be allocated $2,8 billion.
1520: Water supply and sanitation. Dam projects across the country to receive $10,7 billion. $3,9 billion to go towards urban water projects.
1516: Ministry of Mines to receive $1,4 billion. Tourism Ministry to be allocated $1,8 billion. Transport Ministry to receive $30,1 billion and $10,1 billion of that amount to go towards the Harare-Beitbridge road
1514: Govt to set aside US$37 million for youth, and a similar amount for war veterans. 2021 National Budget to allocate $2,2 billion to SMEs Ministry. Ministry of Youth and Sport to receive $3,2 billion
1513: Minerals that have been targeted for beneficiation include PGMs, gold, coal and chrome
1509: Agricultural output targeted increase to US$8, 2 billion. Agriculture Ministry to be allocated $46,3 billion in the 2021 National Budget. Govt to resuscitate Zimbabwe Agricultural Exchange.
1507: Monetary policy will be based on exchange rate stability, financial stability and management of money supply.
1500: Revenues next year expected to reach $390,8 billion. Government is targeting a budget deficit of $30,8 billion next year. It will be on line with SADC threshold. Prof Ncube says there will be an expenditure ceiling of $421,6 billion. Employment costs next year to be capped at $142 billion.
1458: Zimbabwe’s current account expected to remain positive despite vulnerabilities in the global economy. $88, 7 billion in revenues generated to date. A budget deficit of $4,9 billion is expected by year end.
1457: Annual inflation to reduce to an average of 135 percent in 2021. Finance Minister Ncube says exchange rate has been range bound at $81 to the US dollar between July and November 2020. Exchange rate to remain stable next year, says the Treasury boss.
1454: He says Government response is to ensure that economy rebounds in 2021. 7,5 percent GDP growth expected for 2021.
1453: Prof Ncube says Zimbabwe’s economy to contract by – 9 percent this year.
1449: Finance Minister Professor Mthuli Ncube commences his presentation of the 2021 National Budget.
1443: President Mnangagwa has arrived in Parliament.
1430: We will be giving you live updates of the 2021 National Budget Presentation by Finance Minister Mthuli Ncube this afternoon.