Mthuli Ncube cuts back expected budget by 47% , delivers ZW$58,2 tln budget
Business Reporter
FINANCE and Investment Promotion Minister Mthuli Ncube Thursday trimmed vote expectations submitted by the line Ministries from ZW$110 trillion to just ZW$58,2 trillion .
The Treasury boss admitted that his purse was not liquid enough to meet the expectations from line Ministries and the government departments.
“The envelope is limited by the sustainable revenue to GDP ratio of about 18% which has been allocated to MDAs as indicated,” he said.
The budget saw Welfare related Ministries getting the lucrative allocations with the OPrimary and Secondary Education Ministry pocketing ZW$8 trillion , Higher Education ZW$2,3 trillion, Public Service ZW$2,3 trillion and Health and Child Care receiving ZW$6,3 trillion.
The Land and Agriculture Ministry also received a whopping ZW$4,2 trillion.
He said the fiscal policy thrust for the 2024 National Budget is guided by the need to maintain a sustainable budget deficit within the SADC macroeconomic convergence threshold of not more than 3% of GDP.
“Going into 2024, the Government seeks to consolidate and entrench the stability to facilitate economic transformation and preserve disposable incomes,” said Ncube.
The Treasury boss also widened the fiscal space to the extent of going after the US$300 allowances paid to Civil Servants after subjecting them to the pensionable emoluments across the board, effective January 2024.
Despite ravaging inflation, Ncube would not let go of the Income Tax revenue category after setting a tax free threshold of just ZW$750 000 per month which is just close to around US$150 on the official market and slightly below US$100 indexing with the parallel market rate.
He also reviewed the tax-exempt threshold on withholding tax on agricultural commodities that include soya beans, sunflower, groundnuts and cotton seed from US$1 000 per annum to US$5 000 or local currency equivalent.
Ncube also increased tax on high value vehicles from the current 30% up to 50% for vehicles ranging between US$300 000 and US$700 000.
He reviewed upwards the Strategic Reserve Levy by US$0.03 and US$0.05 per litre of diesel and petrol, respectively, with effect from 1 January 2024.
The Treasury boss also introduced a levy of US$0.02 per gram of sugar contained in beverages, excluding water, with effect from 1 January 2024.
In 2024, annual inflation is anticipated to end the year between 10% to 20%, reflecting continued tight monetary and fiscal policies with economic growth projected at 3,5%.
“Mr Speaker Sir, I finally commend the 2024 National Budget to this August House in compliance with the law, and it is accompanied by the relevant documents,” added Ncube.
