Pretty Manyewe
Parliament yesterday heard Finance and Economic Development Minister Mthuli Ncube presenting the priorities that will inform Government spending in 2022.
Professor Ncube started by making it clear that Zimbabwe is still on course to achieve its projected economic growth forecast, which stands at 5.5%.
The growth prospect is backed by an impressive sector growth trajectory recorded in mining, manufacturing, agriculture, construction, accommodation and food services (tourism) sector.
“The 2022 growth projection is, however, subject to risks relating to the future path of the pandemic and its impact on key sectors of the economy.
…annual inflation was on a downward path during the greater part of the year to 54.5% as at October 2021 compared to 471.3% recorded during the same period last year, underpinned by a tight fiscal and monetary stance, “ said Professor Ncube.
He however conceded that the parallel foreign currency and market indiscipline have been obstacles to Zimbabwe`s economic growth.
In understanding the impediments that some of these misaligned economic factors cause, Professor Ncube proposed new tax relief measures which will kick into effect as soon as the country ushers in 2022.
“In order to provide relief to taxpayers and also boost aggregate demand for goods and services, I propose to adjust the tax-free threshold from
ZWL 10 000 to ZWL 25 000 and also adjust the tax bands to end at ZWL 500 000, above which a marginal tax rate of 40% will apply, with effect from 1 January 2022.
I, further, propose to review the tax-free threshold on income accruing in foreign currency from US$ 70 to US$ 100 with effect from 1 January 2022. Other foreign currency tax bands remain unchanged,” proposed Minister Ncube.
He also proposed to review the local currency tax-free bonus threshold from ZWL 25 000 to ZWL 100 000 and the foreign currency tax-free bonus threshold from US$ 320 to US$ 700, with effect from 1 November 2021.
This will cover most civil servants whose Christmas came early after an announcement of an annual bonus payout of up to US$700.
Minister Ncube said the 2022 National Budget aims to buttress the business growth, building on gains of the TSP and enabling an economic resilience against shocks which include the Covid-19 pandemic.
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