Mthuli Ncube makes bold measures to anchor ZiG stability

The Government has introduced measures to enhance the stability of the Zimbabwe Gold (ZiG) currency, promote its use, and provide tax relief to boost consumer spending and production. In the Mid-Term 2024 Fiscal Policy, Finance Minister Professor Mthuli Ncube announced initiatives to improve tax collection and reduce tax evasion.

Since its launch in April, the ZiG has remained stable, and expanding its use is expected to strengthen domestic transactions and macroeconomic stability. This stability aims to foster sustained economic growth, with projections now revised to a 2% expansion for 2024 due to drought and low global mineral prices.

Key measures include mandating local currency payment for presumptive taxes and certain import duties, and requiring government agencies to charge fees in domestic currency. The policy also emphasizes fiscal measures to increase local currency demand, complemented by monetary policies to manage market liquidity.

The government aims to promote financial inclusion and transparency by requiring presumptive taxes in local currency and encouraging small enterprises to use point-of-sale machines and bank accounts linked to the tax authority. Tax cuts up to 80% on presumptive taxes are proposed to boost compliance.

Minister Ncube announced the electronic monitoring of fuel sales starting November 1, 2024, to ensure accurate tax payments. The government will also require duty payments for fuel imports under transit arrangements, with a new system to refund duties at the exit port.

Additionally, companies earning significant foreign currency must pay corporate taxes in both local and foreign currency, while fees for various registrations and licenses will be payable in local currency. The VAT exemption on live animals and certain meats will continue to support the formal market and encourage trading.