Govt targets reduction of tax burden by 2021

Government says Zimbabweans should expect reduction of the tax burden by 2021 as Treasury seeks to address challenges that led to the country experiencing fiscal imbalances.

The reduction in government spending, tightening of controls on the public sector, downward revision of 2019 economic growth forecast to 3.1 percent, reduction in quasi fiscal activities, separation of foreign currency accounts from rtgs balances, payment of foreign currency on car import duty, salary cuts for senior government officials among others have been described by fiscal authorities as painful although leading to prosperity in the near future.

While Zimbabweans are also questioning the credibility of the two percent intermediated money transfer tax in restoring macroeconomic stability or confidence, Finance and Economic Development Minister Professor Mthuli Ncube said the tax will, however, be relaxed or reduced by 2021.

“We are optimistic that the policies will in the short to long term create that platform to sustain economic activities and facilitate overall macroeconomic growth, in fact the policies are necessary to ensure reformation of the economy,” he said.

According to the Transitional Stabilisation Programme (TSP), the austerity measures are also aimed at addressing fiscal and debt challenges for sustained macro-economic stability and growth, strengthening fiscal responsibility over control and management of expenditure as well as financing fiscal deficit requirements from the market at market interest rates.