Business / Economy
Chinamasa unveils $4.1 billion 2015 budget
27 Nov 2014 at 16:58hrs | Views
The Minister of Finance and Economic Development, Patrick Chinamasa has presented a $4.1 billion 2015 National Budget, amid indications that $3.32 billion will go towards employment costs.
Chinamasa made the presentation at Parliament Building this afternoon.
"We are paying people to sit in their offices and not do their tasks. It's important to implement ZIM ASSET to create wealth. This budget is primarily a package of policy interventions to unlock the country's production potential," said Chinamasa.
The Minister highlighted that the 2015 budget is being crafted under the burden of the illegal sanction imposed on the country by the west, urging the nation to craft policies that unlock the value of our natural resources.
Chinamasa said the country's revenue remain depressed, adding that the nation must mobilise additional financial resources in order to meet its macro-economic targets.
The Minister said the country's debt is estimated at $8.387, adding that this has downgraded the country's credit rating, thereby undermining socio-economic development.
He, however said government is negotiating for debt relief with international finance institutions such as the International Monetary Fund (IMF), adding that re-engagement with financial institutions is progressing well as evidence by the implementation of the successor IMF staff monitoring programme (SMP).
Minister Chinamasa said the country's economy is projected to grow by 3.2 percent in 2015.
He said inflation has remained very low with prices of basic goods on the decline due to the appreciation of the US dollar against the South African rand. Chinamasa added that inflation is expected to remain below one percent.
Chinamasa highlighted that Zimbabwe must implement reforms to improve the ease of doing business in the country so as to attract investors.
He added that the 2015 budget should provide clarity on the indigenisation policy.
"Government recognises that the 51/49 percent shareholding threshold cannot be achieved over night. Government through line ministries will negotiate with a particular investor for compliance with the policy," said Chinamasa.
Turning to agriculture, Chinamasa revealed that already $10 million has been disbursed for the purchase of agricultural inputs under the President Inputs Scheme, adding that support has also been given to inputs distributing companies.
Chinamasa said banks' support to agriculture must be buttressed by an efficient pay back system by farmers.
In mining, Chinamasa highlighted that the government will come up with a new mining fiscal regime in order to improve the contribution of the sector to the economy. He said this will include restructuring the gold sector, in particular, small scale miners, as well as consolidating the diamond sector.
Chinamasa said with effect from 01 March 2015, the nation should have a new mining tax regime.
Minister Chinamasa said the Sovereign Wealth Fund is set to become a reality as resources will be allocated to the effect.
He said govern will also establish Special Economic Zones in line with furthering the value addition cluster of the ZIM ASSET.
Chinamasa highlighted that government will endeavour to create an enabling environment for small to medium enterprises that provides for synergies with established companies.
The Minister revealed that the establishment of a Women's Bank has been approved by cabinet and necessary steps will be taken towards its establishment.
Funds have also been allocated towards roads rehabilitation in the country, with Chinamasa revealing that the Harare airport road expansion will be completed end of this year.
He further said funds have been allocated for the rehabilitation of railway network, in particular, the signals and locomotives.
The tourism sector is projected to grow by 4.7 percent next year and Chinamasa said government will continue to promote the sector through incentives such as the proposed suspension of duty on vehicles imported by safari operators
Other highlights of the 2015 National Budget include:
-Budget allocation for establishment of universities in Mashonaland East, Matabeleland South and Manicaland
-$10.5 million towards Constituency Development Fund - $50 000 per constituency (Bill to regulate and account for the funds to be enacted)
-ZINARA appointed agent for collecting presumptive tax on kombis and taxis
-Import duty facility extend to dairy processors
-Suspension of duty on wheat flour
-Suspension of duty on vehicles imported by safari operators
-Excise duty on clear beer reduced from 45% to 30% to stimulate growth on volumes as from 01 January 2015
-Tobacco levy re-introduced with effect from 01 January, 2015
-Aids levy extended to mining firms as from 01 January 2015
-Tax-free threshold increased from $250 to $300 with effect from 01 January 2015
Chinamasa made the presentation at Parliament Building this afternoon.
"We are paying people to sit in their offices and not do their tasks. It's important to implement ZIM ASSET to create wealth. This budget is primarily a package of policy interventions to unlock the country's production potential," said Chinamasa.
The Minister highlighted that the 2015 budget is being crafted under the burden of the illegal sanction imposed on the country by the west, urging the nation to craft policies that unlock the value of our natural resources.
Chinamasa said the country's revenue remain depressed, adding that the nation must mobilise additional financial resources in order to meet its macro-economic targets.
The Minister said the country's debt is estimated at $8.387, adding that this has downgraded the country's credit rating, thereby undermining socio-economic development.
He, however said government is negotiating for debt relief with international finance institutions such as the International Monetary Fund (IMF), adding that re-engagement with financial institutions is progressing well as evidence by the implementation of the successor IMF staff monitoring programme (SMP).
Minister Chinamasa said the country's economy is projected to grow by 3.2 percent in 2015.
He said inflation has remained very low with prices of basic goods on the decline due to the appreciation of the US dollar against the South African rand. Chinamasa added that inflation is expected to remain below one percent.
Chinamasa highlighted that Zimbabwe must implement reforms to improve the ease of doing business in the country so as to attract investors.
He added that the 2015 budget should provide clarity on the indigenisation policy.
"Government recognises that the 51/49 percent shareholding threshold cannot be achieved over night. Government through line ministries will negotiate with a particular investor for compliance with the policy," said Chinamasa.
Turning to agriculture, Chinamasa revealed that already $10 million has been disbursed for the purchase of agricultural inputs under the President Inputs Scheme, adding that support has also been given to inputs distributing companies.
Chinamasa said banks' support to agriculture must be buttressed by an efficient pay back system by farmers.
In mining, Chinamasa highlighted that the government will come up with a new mining fiscal regime in order to improve the contribution of the sector to the economy. He said this will include restructuring the gold sector, in particular, small scale miners, as well as consolidating the diamond sector.
Chinamasa said with effect from 01 March 2015, the nation should have a new mining tax regime.
Minister Chinamasa said the Sovereign Wealth Fund is set to become a reality as resources will be allocated to the effect.
He said govern will also establish Special Economic Zones in line with furthering the value addition cluster of the ZIM ASSET.
Chinamasa highlighted that government will endeavour to create an enabling environment for small to medium enterprises that provides for synergies with established companies.
The Minister revealed that the establishment of a Women's Bank has been approved by cabinet and necessary steps will be taken towards its establishment.
Funds have also been allocated towards roads rehabilitation in the country, with Chinamasa revealing that the Harare airport road expansion will be completed end of this year.
He further said funds have been allocated for the rehabilitation of railway network, in particular, the signals and locomotives.
The tourism sector is projected to grow by 4.7 percent next year and Chinamasa said government will continue to promote the sector through incentives such as the proposed suspension of duty on vehicles imported by safari operators
Other highlights of the 2015 National Budget include:
-Budget allocation for establishment of universities in Mashonaland East, Matabeleland South and Manicaland
-$10.5 million towards Constituency Development Fund - $50 000 per constituency (Bill to regulate and account for the funds to be enacted)
-ZINARA appointed agent for collecting presumptive tax on kombis and taxis
-Import duty facility extend to dairy processors
-Suspension of duty on wheat flour
-Suspension of duty on vehicles imported by safari operators
-Excise duty on clear beer reduced from 45% to 30% to stimulate growth on volumes as from 01 January 2015
-Tobacco levy re-introduced with effect from 01 January, 2015
-Aids levy extended to mining firms as from 01 January 2015
-Tax-free threshold increased from $250 to $300 with effect from 01 January 2015
Source - zbc
