Taxes not solution

Source: Taxes not solution – DailyNews Live

29 May 2017

HARARE – Last week, President Robert Mugabe’s government announced plans
to introduce a fuel levy – news that was received with shock and sadness
by the long-suffering masses.

While the motive – to bankroll a Road Accident Fund (Raf) – is noble, in
light of the road carnage that has been witnessed in past months, surely
its time the authorities realise Zimbabweans are already overtaxed.

Yes, accident victims need insurance cover.

Scores of people have died and many injured in road accidents, and in most
cases, the victims cannot afford to pay basic medical bills.

In that sense, Raf is absolutely necessary.

If properly implemented and managed, it will go a long way in helping
accident victims.

But bankrolling the fund by slapping hard-pressed Zimbabweans with yet
another tax – the proposed fuel levy – is certainly insensitive to the
plight of the struggling populace.

As long-suffering citizens remain burdened by a raft of taxes and are
being taxed to death, the 93 year-old leader must try and look at other
alternative sources of funding, especially that there are seven taxes on
this key commodity.

In March this year, government gazetted new taxes for commuter transport
operators, hairdressers, driving schools and cross-border traders.

The informal traders will pay at least $10 per month.

Apart from that, government had earlier on introduced a five percent
health levy on airtime targeted at funding the depressed health sector.

In addition to these taxes, the struggling citizens also pay the Aids Levy
while their salaries are significantly taxed under pay-as-you-earn (Paye)
of at least 20 percent.

Motorists are also taxed through toll gate fees, vehicle licences and
authorities are planning to introduce urban tolling.

Had it not been the public outcry which led to a reversal, the authorities
had early this year imposed a 15 percent value added tax on meat and
potatoes.

This long list of taxes – or levies – goes to show how government is not
going out of its way to boost its revenue through productive ways, but is
simply squeezing the ordinary citizen, who is toiling every day to put
food on the table.

Surely, government cannot continue sustaining its expenditure by imposing
endless taxes on hapless citizens.

It is unsustainable.

All these desperate measures to boost dwindling national revenue can only
work for so long.

The solution lies in boosting exports, creating new jobs, setting the
economy on a sustainable growth path and embracing other cash-saving
measures such as cutting back on Mugabe’s unnecessary travels.

Taxes are sustainable in functional and ticking economies where the
industry is productive and new jobs are created.

Currently, Zimbabwe’s economy is largely driven by the informal sector.

Industries and companies have collapsed. Formal employment is depressed.

According to the Zimbabwe National Statistics agency (ZimStat)’s 2015
report, 94,5 percent of the 6,3 million people defined as employed in the
country work in the informal economy.

Comparable data for 2011 – published by ZimStat – indicate that in the
three years to 2014, informal sector employment grew by a staggering 29
percent, from 4,6 million to 5,9 million jobs.

These statistics – which are signs of an unhealthy and dying economy –
prove that majority of the nation are surviving through hustling.

Considering this, government must devise other ways of raising funds – and
not squeezing the already burdened citizens through multiple taxes.

As such, authorities need to act, and immediately, on the dying economy.