‘The move to exclude informal traders from the mainstream economy will bring more pain to the already impoverished’
PARLIAMENT must reject the anti-people and anti-industry budget which was presented by finance minister Mthuli Ncube on Thursday.
The proposed tax hikes and the move to exclude informal traders from the mainstream economy will bring more pain to the already impoverished people.
The decision to exclude traders without VAT certificate from buying directly from manufacturers is very harsh and insensitive considering that more than six million people live on street hawking in the face of 85 percent formal unemployment and a drought of economic opportunities. These people, in their individual capacities, don’t have annual sales turnover of US$25,000 which is required to secure the VAT certificate.
This measure is expected to impact on the manufacturing sector negatively because the informal sector helps them to push volumes especially in manufacturing industries such as food and beverages (bread, ice cream, drinks, etc). In the bread sector, for example, the volumes are pushed by vendors and tuckshops (not supermarkets) which are now supposed to be excluded from the bread value chain. This will result in a drastic fall in sales which has a net negative effect on production and jobs. Is Mthuli Ncube aware of these dynamics and possibilities?
The following increases in taxes, levies and fees are a thorn in the flesh for an already struggling population: – more than 100 percent increase in toll fees will push up bus fares and transport costs for the commuting public. The rural folks and pensioners will suffer the most as the timing of this policy measure is coinciding with a devastating drought – they will have to bear with these new measures over and above their struggle to put food on the table.
The introduction of levies on beverages with sugar is again insensitive as these are the drinks of the poor and our children.
Passport and vehicle registration fees hikes are again schemes put in place to milk the poor.
Here is the 2024 Budget Statement by Finance Minister Mthuli Ncube: Budget Statement 2024 Final
The US$300 which civil servants were getting as Covid-19 and ‘cushioning’ allowance is now pensionable, which means it will be taxed come January 2024. This is so insensitive to the underpaid civil servants who were expecting a significant salary hike.
The wealth tax on property owners reminds one of the Rhodesian government which introduced hut tax. Mthuli Ncube admires the very same exploitative tax regime and introduces it again in “independent” Zimbabwe.
If parliament is going to act in the best interests of the public, they must reject this budget and demand that Ncube redoes the budget and produces a pro-poor budget. It is my prayer that Zanu PF and CCC MPs unite on this one and reject this useless budget.
If Zanu PF use their majority vote to support this useless budget and overpower CCC by virtue of their numbers, they are voting for more poverty for their rural constituencies where they got most of their votes. In the same way, they are punishing the six million people in the informal sector as they will be endorsing their exclusion from economic activity.
Prof Gift Mugano is an economist and Director of the Centre for African Governance & Development|