Chinamasa's 2017 headache

Finance minister Patrick Chinamasa has to make bold decisions when formulating the 2017 national budget and reduce taxes as well as encourage the wider use of the South African rand to save the economy from total collapse.

The advice given by workers, industrialists and the business community came a few weeks before Chinamasa presents the budget on December 8 amid rising expectations for decisive action by government to stop the economic malaise.

Zimbabwe Congress of Trade Union secretary-general Japhet Moyo said a review of the tax regime had become urgent considering that most companies were struggling and a number of workers had lost their jobs.

"Most people are heavily taxed in Zimbabwe and the next budget should address the issue of the tax regime," he said.

"A lot of people are no longer formally employed, hence more money should be spent on social welfare programmes, such as the [Basic Education Module] Beam and on access to medication."

Caleb Fundanga, the Macroeconomic and Financial Management Institute of Eastern and Southern Africa executive director urged Chinamasa to review mining taxes and do away with subsidies in some sectors.

He also recommended the taxing of the informal sector.

Confederation of Zimbabwe Industries president Busisa Moyo said in addition to reviewing taxes, the minister must present a rand-denominated budget instead of using the United States dollar.

Moyo said 70% of Zimbabwe's exports were sold in rands, with 30% of the country's imports coming from South Africa.
"The next step is a strong signal by government departments by advertising fees in rand and that tax is payable in rand as well as the banking system," he said.

"There should also be a reduction in taxes."