HARARE – Economist Gift Mugano has urged the parliament to reject the budget presented by Finance Minister Mthuli Ncube yesterday, calling it anti-people and anti-industry. He said the budget would bring more pain to the already impoverished people and the struggling manufacturing sector.
Mugano criticized the proposed tax hikes and the move to exclude the informal traders from the mainstream economy. He said the decision to exclude traders without VAT certificate was very harsh and insensitive, considering that more than 6 million people thrived on trading in the face of 85% formal unemployment and drought of economic opportunities. He said these people did not have annual sales turnover of US$25000, which was required to secure the VAT certificate.
He also said this measure would impact negatively on the manufacturing sector, especially in food and beverages industries, where the informal sector helped them to push volumes. He gave the example of the bread sector, where the volumes were pushed by vendors and tuckshops, which were now supposed to be excluded from the bread value chain. He said this would result in drastic fall in sales, which would have a net negative effect on production and jobs.
He questioned if Mthuli Ncube was aware of these dynamics and possibilities, and listed the following increases in taxes, levies and fees as a thorn in the flesh for an already struggling population:
– More than 100% increase in toll fees, which would push up bus fares and transport cost for the commuting public. He said the rural folks and pensioners would suffer the most, as the timing of this policy measure coincided with a devastating drought.
– Introduction of levies on beverages with sugar, which he said were the drinks of the poor and the children.
– Passport and vehicle number plates fees hikes, which he said were schemes put in place to milk the poor.
– The US$300 tax threshold, which he said was so insensitive to the underpaid civil servants who were expecting a salary hike.
– Wealth tax, which he said reminded him of the Rhodesian government, which introduced hut tax, and accused Mthuli Ncube of admiring the same exploitative tax regime.
He appealed to the parliament to act in the best interest of the public and reject this budget. He asked Mthuli Ncube to redo the budget and produce a pro-poor budget. He prayed that ZANU-PF and CCC MPs would unite on this one and “reject this useless budget.” He warned that if ZANU-PF used their majority vote to support this budget and overpower CCC by virtue of their numbers, they would be voting for more poverty for their rural constituencies and the 6 million people in the informal sector.