News / National
Biti slashes 2012 national budget, increases excise duty on fuel
18 Jul 2012 at 17:18hrs | Views
Zimbabweans should brace for tough times ahead as the Finance Minister, Mr Tendai Biti has slashed the 2012 national budget and increased excise duty on fuel prices.
Presenting the Mid-Term Fiscal Policy Review in Harare, Minister Biti announced a reduction of the 2012 national budget to US$3,4 billion from initial estimates of US$4 billion, citing the underperformance of key productive sectors.
The Minister also proposed a more than 10% increase in excise duty on fuel prices in a move that is expected to increase prices as the budget review was silent on income tax free threshold adjustments or salary increments for the public sector employees.
Mr Biti revealed that lack of capital inflows and failure to implement policies had resulted in fiscal authorities reducing the 2012 Gross Domestic Product (GDP) targets to 5,6% from 9,4%.
But inflation, which is currently hovering at 3,9% is being anticipated to reach its targeted level of 5%.
Failure by fiscal authorities to come up with realistic targets has also been exposed with the review statement showing that government has also missed its revenue and expenditure targets in the first six months of this year.
"We have to stick to what we have otherwise this is likely to be a failed thing," admitted Mr Biti.
Some of the key highlights of the 2012 Mid-Term Fiscal Policy include a projected 15% growth rate target by 2015, support to agricultural sector facilities, mobilisation of additional funding, monitoring of the Medium Term Plan (MTP) and increasing foreign direct investment, among other factors.
Presenting the Mid-Term Fiscal Policy Review in Harare, Minister Biti announced a reduction of the 2012 national budget to US$3,4 billion from initial estimates of US$4 billion, citing the underperformance of key productive sectors.
The Minister also proposed a more than 10% increase in excise duty on fuel prices in a move that is expected to increase prices as the budget review was silent on income tax free threshold adjustments or salary increments for the public sector employees.
Mr Biti revealed that lack of capital inflows and failure to implement policies had resulted in fiscal authorities reducing the 2012 Gross Domestic Product (GDP) targets to 5,6% from 9,4%.
But inflation, which is currently hovering at 3,9% is being anticipated to reach its targeted level of 5%.
Failure by fiscal authorities to come up with realistic targets has also been exposed with the review statement showing that government has also missed its revenue and expenditure targets in the first six months of this year.
"We have to stick to what we have otherwise this is likely to be a failed thing," admitted Mr Biti.
Some of the key highlights of the 2012 Mid-Term Fiscal Policy include a projected 15% growth rate target by 2015, support to agricultural sector facilities, mobilisation of additional funding, monitoring of the Medium Term Plan (MTP) and increasing foreign direct investment, among other factors.
Source - Zbc
