FINANCE, Economic Development and Investment Promotion minister Mthuli Ncube has introduced a raft of new taxes, including a Fast Foods Tax, Betting Tax, Plastic Carrier Bag Tax, and Rental Income Tax.
In a bid to boost revenue, the Treasury boss also proposed revising the Capital Gains Tax on marketable securities from a temporary 2% withholding tax to a final 1% tax from January 1, 2025.
Furthermore, excise duty on alcoholic beverages will be increased from US$0,25 per litre to US$0,30 per litre, while royalties on quarry stones will be a flat 0,5% of their sales value.
While acknowledging the Treasury's mandate to collect revenue through various tax heads, it is astonishing to see the government continually piling more taxes on citizens.
It appears the government is indifferent to the plight of its citizens, as long as it meets its revenue targets. Pleas to reduce taxes or explore alternative revenue streams have fallen on deaf ears.
For instance, in the lead-up to the 2025 National Budget, individuals and industry bodies, including banks, lobbied for the 2% Intermediated Money Transfer Tax (IMTT) to be reduced or made deductible.
The Zimbabwe National Chamber of Commerce (ZNCC) described the IMTT as a form of "double-dipping" by the government. The Bankers Association of Zimbabwe argued that the IMTT was driving the economy further into informality, resulting in revenue losses. These concerns were shared by the ZNCC and the Confederation of Zimbabwe Retailers.
However, presenting the 2025 National Budget, Ncube disregarded these concerns and introduced fresh taxes instead.
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There is a high likelihood that the government will reap unintended consequences from these taxes, such as formal businesses opting to operate informally to avoid excessive taxation.
Moreover, the lack of transparency and accountability in the use of funds generated from these taxes is disturbing.
The misuse of public resources by government officials is also a cause for concern. For example, the government introduced a special surtax on cordials earlier this year, purportedly to purchase cancer machines. However, with the year drawing to a close, no cancer machines have been acquired.
Where has the money gone?
Furthermore, we have witnessed the government purchasing luxury vehicles for chiefs and other officials, rather than prioritising service delivery. As we write, the health and education sectors are in disarray. Public hospitals are hazardous, while school infrastructure is deplorable. We urge the government to be accountable and transparent in its use of public funds. It must also exercise responsibility in its expenditure. More resources should be allocated towards service delivery, rather than luxury items.
Ultimately, the government must rethink its approach to taxation and prioritise the welfare of its citizens. The current tax regime is unsustainable and will only serve to exacerbate the country's economic woes. We hope policymakers will take heed of these concerns and work towards creating a more equitable and sustainable tax system.
