Zimbabweans face higher taxes if RBZ Debt Assumption Bill passes

Zimbabweans could pay higher taxes if Parliament adopts the proposed RBZ Debt Assumption bill. Analysts said government will have no option but to hike taxes in order raise funds to repay the RBZ debt.

They say the current situation is that RBZ has no capacity to service bonds and although government has offered to assume the Central Bank debt.

Analysts Cade Zvavanjanja said warned the tax hike would be impractical on government's part as the country's tax gross domestic product. According to IMF a country taxes must match its per capita.

Currently the Zimbabwe tax GDP ratio stands at about 49,3% and this is already too high.

Government is mulling amendments that effectively grant banks immunity against claims made for monies seized by the Reserve Bank of Zimbabwe prior to December 31, 2008 as part of broad measures being considered in the RBZ Debt Assumption Bill 2014.

The Bill, submitted to Parliament in April this year, seeks to transfer the $1.3 billion the RBZ owes to central Government which in essence every Zimbabwean young and old will take up about $100 in fresh bid.

This saw the central bank making use of privately held foreign currency balances. As such banks found themselves suddenly owing depositors whose money had been appropriated by the RBZ.

Other banks feared that the floodgates would be opened with creditors besieging them for money used by the central banks.