‘Zimbos’ now taxed to death

By | April 3, 2017

Source: ‘Zimbos’ now taxed to death – DailyNews Live

John Kachembere      2 April 2017

HARARE – President Robert Mugabe’s cash-strapped government is going for
broke – slapping long-suffering poor Zimbabweans with a raft of new taxes
in its desperate efforts to raise revenue to meet its obligations,
including paying its restive workers on time.

So financially distressed has the government become, that last week alone
it introduced a number of new taxes which targeted airtime vendors, other
struggling micro enterprises, small-scale tobacco farmers, motorists and
commuter omnibus owners – in fraught moves which have been roundly slated
by analysts as akin to “killing the hen that lays the golden eggs”.

This comes as the warring ruling Zanu PF’s deadly tribal, factional and
succession wars have reached alarming levels, amid growing fears that the
country could soon grind to a halt if the mindless bloodletting continues
unabated.

The developments also come as there are growing fears that the country’s
economy may soon hit the disastrous lows of 2008 – as bond notes continue
to lose their value against the United States dollar, with the coveted
greenback now almost completely unavailable on the open market.

At the same time, economists have previously told the Daily News on Sunday
that poverty levels in the country are skyrocketing, with average incomes
now at their lowest levels in more than 60 years – and more than 76
percent of the country’s families now having to make do with pitiful
incomes that are well below the poverty datum line of more than $500.

Still, no one could have predicted last week’s fresh dose of bad news when
the nation woke up to the new government order that hairdressers, kombi
owners, airtime vendors, driving school owners and motorists – among many
others – were now required to pay a range of taxes and spot fines, at a
time that most families are struggling to put food on the table.

Soon after, it was the turn of small-scale tobacco farmers to be shocked
when the government announced last Thursday that they also needed to pay a
10 percent tax on their sales – prompting them to threaten to withhold
their crops until the State explained its surprising decision.

“This regime has become a monster that not only wants to wring every cent
from its citizens, but is also eating them alive,” Tapiwa, a hairdresser
in downtown Harare, moaned to the Daily News on Sunday yesterday – warning
that the new taxes would drive most hairdressers and other small economic
players underground.

Economic experts also said the raft of new taxes were to a large extent
“self defeating”.

“Such a far-reaching taxation system discourages investment because a
number of start-ups and entrepreneurs are not yet in a position to start
paying so many taxes,” economist Primrose Ncube told the Daily News On
Sunday.

Political analysts also warned yesterday that the government was now
skating on thin ice as its tax regime was “testing” the patience of
overburdened ordinary citizens.

“This over-taxing of the people could be the last straw before an open
revolution erupts. In the United States it was a revolt against unjust
taxes that triggered the revolution, and many revolutions have been borne
out of the rejection of unjust taxes.

“Zimbabweans must start demanding accountability and say ‘no taxation
without accountability and justice’,” political analyst Dewa Mavhinga
said.

Tax experts also said there was no guarantee that the government would use
the revenue from the new taxes to grow the country’s dying economy.

“Unlike in developed countries where high revenue collections often result
in positive expenditure on basic public services such as education and
health, it is not the same in Africa. African countries have a reputation
of poor revenue management, and accountability and transparency rarely
exist.

“This means that increasing revenue collection does not guarantee a better
life for the poor who depend on public services.

“For example, in Zimbabwe, public expenditure on health over the years has
been well below the Abuja commitment for African governments,” said Cephas
Makunike, an executive with Tax Justice Network Africa.

The government is experiencing a severe cash crisis which has seen it
failing to pay its civil servants on time, as the local economy continues
to die.

The spokesperson for the opposition People’s Democratic Party (PDP), Jacob
Mafume, said the government needed to introduce far-reaching reforms,
including trimming its workforce, instead of burdening hard-up citizens.

“Imposing new taxes will only increase shelf prices, thereby further
deterring consumers from spending. In short, the peasantry being displayed
by Chinamasa is working well to dig this economy further down the abyss.

“Instead of punishing the poor, focus must be on real reforms which
include trimming the ever ballooning travel budget, with the head of the
State the chief culprit,” Mafume said.

“Zanu PF must also trim the executive. The current size of the Cabinet is
a huge burden on the nation’s fiscus, considering that ministers drive the
latest expensive off-road vehicles, on top of official Mercedes Benz
vehicles, on top of other benefits,” he added.

George Mushipe, spokesperson of the Apex Council – the umbrella union for
civil servants – said the new taxes would worsen the plight of the
country’s toiling masses.

“Civil servants are overtaxed already and our disposable income continues
to shrink. Yes, they (the government) must raise revenue for the State,
but they should put a human face on this, especially in the light of the
prevailing economic environment,” he said.

Mugabe and his warring ruling Zanu PF, in power since Zimbabwe’s
independence from Britain in 1980, stand accused of turning the once
thriving local economy, which at one time was regarded as the bread basket
of Africa, into a basket case.

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